ContentsFuture Developments . . . . . . . . . . . . 1Photographs of Missing Children . . . . . 2Introduction . . . . . . . . . . . . . . . . . . 2Definitions . . . . . . . . . . . . . . . . . . . 2Debt Instruments on the OID List . . . . . 3Debt Instruments Not on the OID

List . . . . . . . . . . . . . . . . . . . . 3Information for Brokers and Other

Middlemen . . . . . . . . . . . . . . . . 3Short-Term Obligations

Redeemed at Maturity . . . . . . . . 4Long-Term Debt Instruments . . . . . . 4Certificates of Deposit . . . . . . . . . . 4Bearer Bonds and Coupons . . . . . . . 4Backup Withholding . . . . . . . . . . . 5

Information for Owners of OID Debt Instruments . . . . . . . . . . . . . . . 5Form 1099-OID . . . . . . . . . . . . . . 6How To Report OID . . . . . . . . . . . 7Figuring OID on Long-Term

Debt Instruments . . . . . . . . . . . 7Figuring OID on Stripped Bonds

and Coupons . . . . . . . . . . . . 12Index . . . . . . . . . . . . . . . . . . . . . 16

Future DevelopmentsFor the latest information about developments related to Pub. 1212, such as legislation enacted after it was published, go to www.irs.gov/pub1212.

What's NewEffective January 1, 2014, upon the sale of a debt instrument that is a covered security under Regulations section 1.6045-1(a)(15), securities brokers and other affected persons must report to the IRS and customers (on Form 1099-B, Proceeds From Broker and Barter Exchange Transactions) the adjusted basis of the debt instrument and whether any gain or loss upon the sale is long-term, short term, or ordinary. See TD 9616, available at www.irs.gov/irb/2013-20_IRB/ar07.html. For more information, see the 2014 Instructions for Form 1099-B. Contingent payment debt instruments, variable rate debt instruments, inflation protected debt instruments, stripped bonds and stripped coupons, and certain other debt instruments that are covered securities are not subject to reporting until January 1, 2016. See Regulations section 1.6045-1(n)(3).

Effective January 1, 2014, there are new reporting requirements for a debt instrument that is a covered security under Regulations section 1.6045-1(a)(15)(i)(C) that is acquired by a taxpayer with market discount, bond premium, or acquisition premium. See TD 9616,

Department of the TreasuryInternal Revenue Service

Publication 1212(Rev. December 2014)Cat. No. 61273T

Guide toOriginalIssueDiscount (OID)Instruments

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available at www.irs.gov/irb/2013-20_IRB/ar07.html. For more information, see the 2014 Instructions for Forms 1099-INT and 1099-OID.

Photographs of Missing ChildrenThe Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.

IntroductionThis publication has two purposes. Its primary purpose is to help brokers and other middlemen identify publicly offered original issue discount (OID) debt instruments they may hold as nomi-nees for the true owners, so they can file Forms 1099-OID or Forms 1099-INT as required. The other purpose of the publication is to help own-ers of publicly offered OID debt instruments de-termine how much OID to report on their in-come tax returns.

The list of publicly offered OID debt instru-ments (OID list) is on the IRS website. The origi-nal issue discount tables, Sections I-A through III-F, are only available on the IRS website at www.irs.gov/pub1212 by clicking the link under Recent Developments. The tables are posted to the website in late November or early Decem-ber of each year. The information on these lists comes from the issuers of the debt instruments and from financial publications and is updated annually. (However, see Debt Instruments Not on the OID List, later.)

Brokers and other middlemen can rely on this list to determine, for information reporting purposes, whether a debt instrument was is-sued at a discount and the OID to be reported on information returns. However, because the information in the list has generally not been verified by the IRS as correct, the following tax matters are subject to change upon examina-tion by the IRS.

The OID reported by owners of a debt in-strument on their income tax returns.The issuer's classification of an instrument as debt for federal income tax purposes.

Instructions for issuers of OID debt instruments. In general, issuers of publicly offered OID debt instruments must, within 30 days after the issue date, report information about the in-struments to the IRS on Form 8281, Information Return for Publicly Offered Original Issue Dis-count Instruments. In addition, Form 8281 must be filed for a debt instrument that is part of an issue the offering of which is registered with the Securities and Exchange Commission after the issue date of the debt instrument and such reg-istration occurs on or after January 1, 2014. See the form instructions for more information.

Issuers should report errors in and omissions from the list in writing at the following address:

IRS OID Publication ProjectSE:W:CAR:MP:TFP1111 Constitution Ave. NW, IR-6526Washington, D.C. 20224

REMIC and CDO information reporting requirements. Brokers and other middlemen must follow special information reporting re-quirements for real estate mortgage investment conduits (REMIC) regular, and collateralized debt obligations (CDO) interests. The rules are explained in Publication 938, Real Estate Mort-gage Investment Conduits (REMICs) Reporting Information (And Other Collateralized Debt Ob-ligations (CDOs)).

Holders of interests in REMICs and CDOs should see chapter 1 of Publication 550 for in-formation on REMICs and CDOs.

Comments and suggestions. We welcome your comments about this publication and your suggestions for future editions.

You can send us comments from www.irs.gov/formspubs. Click on More Infor-mation and then on Give us feedback.

Or you can write to:

Internal Revenue ServiceTax Forms and Publications1111 Constitution Ave. NW, IR-6526Washington, DC 20224

We respond to many letters by telephone. Therefore, it would be helpful if you would in-clude your daytime phone number, including the area code, in your correspondence.

Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.

Ordering forms and publications. Visit www.irs.gov/formspubs to download forms and publications. Otherwise, you can go to www.irs.gov/orderforms to order forms or call 1-800-829-3676 to order current and prior-year forms and instructions. Your order should arrive within 10 business days.

Tax questions. If you have a tax question, check the information available on IRS.gov or call 1-800-829-1040. We cannot answer tax questions sent to the above address.

Useful ItemsYou may want to see:

PublicationWithholding of Tax on Nonresident Aliens and Foreign EntitiesInvestment Income and ExpensesReal Estate Mortgage Investment Conduits (REMICs) Reporting Information (And Other Collateralized Debt Obligations (CDOs)).

515

550 938

Form (and Instructions)Annual Summary and Transmittal of

U.S. Information ReturnsProceeds From Broker and Barter

Exchange TransactionsInterest IncomeOriginal Issue Discount

Sales and Other Dispositions of Capital Assets

Interest and Ordinary DividendsCapital Gains

and LossesInstructions for the Requester of Forms W-8BEN, W-8ECI, W-8EXP, and W-8IMY

See How To Get Tax Help near the end of this publication for information about getting publi-cations and forms.

DefinitionsThe following terms are used throughout this publication. Original issue discount is defined first. The other terms are listed alphabetically.

Original issue discount (OID). OID is a form of interest. It is the excess of a debt instru-ment's stated redemption price at maturity over its issue price (acquisition price for a stripped bond or coupon). Zero coupon bonds and debt instruments that pay no stated interest until ma-turity are examples of debt instruments that have OID.

Accrual period. An accrual period is an inter-val of time used to measure OID. The length of an accrual period can be 6 months, a year, or some other period, depending on when the debt instrument was issued.

Acquisition premium. Acquisition premium is the excess of a debt instrument's adjusted ba-sis immediately after purchase, including pur-chase at original issue, over the debt instru-ment's adjusted issue price at that time. A debt instrument does not have acquisition premium, however, if the debt instrument was purchased at a premium. See Premium, later.

Adjusted issue price. The adjusted issue price of a debt instrument at the beginning of an accrual period is used to figure th