Tax Reporting: Original Issue Discount (OID)

Original issue discount (OID) is reported on Form 1099-OID.  Although you may not have received a cash payment from the obligation during the year, if the obligation was originally issued at a discount, IBKR is required to report a portion of that OID each year it is held in your account.  Refer to IRS Publication 550, Investment Income and Expenses, for information on how to report OID and Publication 1212, Guide to Original Issue Discount (OID) Instruments, to calculate the correct amount of OID to report on your tax return.  Consult your tax advisor for further guidance.

In compliance with Treasury Department Circular 230, unless stated to the contrary, any information contained in this FAQ was not intended or written to be used and cannot be used for the purpose of avoiding tax penalties that may be imposed on any taxpayer.