TurboTax FAQ
TurboTax FAQ
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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.

  1. Select Federal Taxes
    (Personal in the Home & Business edition).
  2. Select the Wages & Income, and in the new screen, click either Jump to a full list or I'll choose what I work on.
  3. 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.
  4. 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.