Form 1099-OID, Original Issue Discount
What is Form 1099-OID?
You are issued a Form 1099-OID when you purchase a bond or note for an amount that is less than face value. An OID (Original Issue Discount) is the excess of a bond or note's stated redemption price over its issue price.
The stated redemption price is usually the face value of the bond or note (say $10,000). The issue price is generally the amount at which the bond or note was first sold by the issuer (say $9,500).
The profit you make on the purchase ($500 in our example) is the OID and is taxable interest income for you over the life of the bond. You must include a part of the OID as interest income each year you hold the bond - even if you don't actually receive any interest until the bond matures. You'll be issued a Form 1099-OID to document your OID interest.
Entering Form 1099-OID into TurboTax
You can use either the Guide Me interview, or use these steps to go to the entry screen for this topic.
- Select Federal Taxes
(Personal in the Home & Business edition).
- Select the Wages & Income, and in the new screen, click either Jump to a full list or I'll choose what I work on.
- Under the Interest and Dividends group, either:
- Click on the show more + button next to the 1099-OID topic, then follow the next bullet step.
- Click on the Start/Update button next to the 1099-OID, Foreign Accounts topic.
- Follow the prompts to enter your form.
After you have entered your first 1099-OID, you can add another form by clicking on the Add Another Payer button.