Structured CDs and a 1099-OID form
I don’t know if anyone is familiar with structured CDs. They are instruments that are offered by brokerage houses and banking institutions alike. The principal is guaranteed by a zero coupon bond and the performance is based on stock options. My questions is in regards to the 1099-OID that I received, I don’t really understand what it means or what effect it has on my reportable income, if any.
Permalink Submitted by mk foss on Thu, 2011-04-07 04:25
When a interest-paying instrument (like a zero coupon bond) is purchased at a discount, the investor is required to report OID as interest income. The OID adds to the basis of the investment. If held to maturity the basis will equal the face value so there is no gain or loss. The OID reporting is required to prevent someone from trying to report the discount as a capital gain.
Just add the OID amount to the interest section of Schedule B on your tax return.
Permalink Submitted by Lee Martinson on Thu, 2011-04-07 16:05
I assume that if said instruments are held in an IRA, then there is no OID to report and no 1099-OID issued?
Permalink Submitted by Alan Spross on Thu, 2011-04-07 17:41
Correct. I assume the original question was not IRA related.
Permalink Submitted by Nelie Cruz on Mon, 2024-05-06 01:30
I just received a notice from my bank that they sent a Revised Statement as of 4/19/2024 of the 2023 Tax and Year End Statement. On this Revised Statement, there is now an amount in the “Summary of Form 1099-OID” box, which was empty on the previous statement that I got from them last January 31, 2024. There is now an amount of over $200 with the description, “Original Issue Discount (non-US Treasury Obligation).
Since I have already filed my tax return last March, 2024, I don’t know what I am supposed to do with this Revised Statement and form 1099-OID. Do I need to file an amended return? Please advise.
I will greatly appreciate your prompt reply on this.
Thank you.