A 1099 OID form is known as an Original Issue Discount form. It is used by the IRS for tax purposes. A person will receive this form if you have purchased a note or bond at less than the face value. The form will state the face value of the bond or not and it will also include the actual redemption price paid by the taxpayer.
The profit that is made by the taxpaying party is considered to be taxable income. Every year that you hold this bond or note, you will receive a 1099 OID form, and you must include the information on the form in your yearly tax return.
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