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Information about Form 1099-OID

Updated: 12/07/2007
Article ID: 3483

Select a link below to go directly to a topic or read through the document to learn about Form 1099-OID.

What is Form 1099-OID?

You are issued a Form 1099-OID when you have purchased 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.

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How do I enter Form 1099-OID?

For TurboTax Basic, Deluxe, or Premier:

  1. Select the Federal Taxes tab, then select Income.
  2. In the Your Income screen, select the Select Specific Topics button.
  3. In the Your Income screen, select Interest and Dividends, then select the Start or Revisit button for 1099-OID.

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  1. In the Miscellaneous Investment Income screen, select the Form 1099-OID check box.

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  1. In the Original Issue Discount screen, enter the interest information exactly as it appears on the Form 1099-OID you received.
  2. Follow the on-screen instructions.

For TurboTax Home & Business:

  1. Select the Personal tab, then select Personal Income.
  2. In the Your Personal Income screen, select the Select Specific Topics button.
  3. In the Your Personal Income screen, select Interest and Dividends, then select the Start or Revisit button for 1099-OID.
  4. In the Miscellaneous Investment Income screen, select the Form 1099-OID check box.
  5. In the Original Issue Discount screen, enter the interest information exactly as it appears on the Form 1099-OID you received.
  6. Follow the on-screen instructions.

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