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Important
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For information call now:
(347) 989-4566
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Additional information
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Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342
IN
1-800-829-1040
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Original Issue Discount
The amount of original issue discount (OID) is the difference between the stated
redemption price at maturity and the issue price of the debt instrument. The 30%
tax applies in the following circumstances.
1. You received a payment on a debt instrument. In this case,
the amount of OID subject to tax is the OID that accrued while you held the debt
instrument minus the OID previously taken into account. But the tax on the OID
cannot be more than the payment minus the tax on the interest payment on the
debt instrument.
2. You sold or exchanged the debt instrument. The amount of OID
subject to tax is the OID that accrued while you held the debt instrument minus
the amount already taxed in (1) above.
Report on your return the amount of OID shown on Form 1042-S, Foreign Person�s
U.S. Source Income Subject to Withholding, if you bought the debt instrument at
original issue. However, you must recompute your proper share of OID shown on
Form 1042-S if any of the following apply.
� You bought the debt instrument at a premium or paid an acquisition premium.
� The debt instrument is a stripped bond or a stripped coupon (including zero
coupon instruments backed by U.S. Treasury securities).
� The debt instrument is a contingent payment or inflation-indexed debt
instrument.
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