Examples of OID in a sentence
There will be additional OID on the Notes to the extent the issue price of the Notes is less than their stated principal amount.
In general, the amount of OID included in income in each taxable year by a U.S. Holder of a Note is the sum of the daily portions of OID with respect to such Note for each day during such taxable year (or portion of such taxable year) on which the U.S. Holder held the Note.
A U.S. Holder must include OID in income as ordinary income for U.S. federal income tax purposes as it accrues under a constant yield method in advance of receipt of the cash payments attributable to such OID, regardless of such U.S. Holder’s regular method of tax accounting.
The amount of OID allocable to each accrual period is generally equal to the product of the Note’s adjusted issue price at the beginning of such accrual period and its yield to maturity (determined on the basis of compounding at the close of each accrual period and appropriately adjusted to take into account the length of the particular accrual period).
Interest on the Notes that is not OID will be included by a U.S. Holder in income as ordinary income in accordance with such U.S. Holder’s method of accounting for U.S. federal income tax purposes.