An irrevocable election may be made, on an obligation-by-obligation basis, to determine the amount of original issue discount
by using daily compounding at a constant interest rate.
OID bonds are to appear in IRS Publication 1212 after bond issuers -- primarily corporations -- supply IRS with information by filing Form 8281, Information Return for Publicly Offered Original Issue Discount
21) Prior to the Chateaugay decision, no court had ruled whether original issue discount
could occur for claims-valuation purposes in a debt-for-debt exchange offer in which the new debt has a face value in excess of the market value of the surrendered instrument.
Original issue discount
arises when a debt instrument is issued for a price less than its stated principal amount.
Original issue discount
on certificates of deposit with a term of one year or less does not have to be reported until the year of disposition.
Simultaneously with the offering of New Debentures and Warrants, pursuant to Exchange Agreements, the holders of the Company's Original Issue Discount
Debentures issued on July 17, 2017 and due October 17, 2017 will exchange $4,136,862 principal amount of such debentures for $6,412,136 of new debentures on the same terms as, and pari passu with, the New Debentures (the "Exchange Debentures" and, together with the New Debentures, the "Debentures") and Warrants.
In response to the widespread use of high-yield original issue discount
(OID) and paid-in-kind (PIK) debt in acquisitions, Congress added Sec.
The regulations also apply to guaranteed payments to a partner for the use of capital and to loans that have unstated or foregone interest or original issue discount
The Tax Court decided the covenant not to compete was valid and amortizable over its three-year life; however, the expenses associated with the acquisition were nondeductible and the warrants had a zero fair market value, creating no original issue discount
The price of the Notes disclosed above is the price that should be used for purposes of determining original issue discount
under the Internal Revenue Code.
The loan will be made at par without original issue discount
7) His basis is generally his cost of acquisition adjusted by (i) adding any original issue discount
and market discount included in income as it accrued, (8) or (ii) subtracting the amount of premium deductible or applied to reduce interest payments over the period he held the bond if he elected to amortize the premium (see Q 1110, Q 1116, Q 1120).