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    #1

    Negative OID

    Do I deduct a negative OID on Schedule B ?

    I can't remember if it is allowed to be deducted on Schedule B against other interest earnings.

    I have a 1099-OID Box 1 with an amount of $ -2202.00

    Thank you in advance for your knowledge once again.
    I hate doing taxes after season . . . . my brain just does not function well after April 15.
    "And So It Begins!!!"
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    #2
    In the past I have had negative dividends due to a T/P holding a short posistion on a stock. He owed and paid those dividens on his short posistion. Schedule B would not take the negitive dividends so I decided to add it to the basis of the stock when it was sold. Maybe you need to do the same...???
    This post is for discussion purposes only and should be verified with other sources before actual use.

    Many times I post additional info on the post, Click on "message board" for updated content.

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      #3
      I handled the negative OID as a future deduction against positive OID because of the quote below: (The website follows the quote.)

      Special Rules and Considerations. If the amount of OID computed for a Regular Security during an accrual period is negative (“Negative OID”), the amount of OID on such Security will be treated as zero for that period, and the Holder generally will be entitled to offset the Negative OID only against future positive OID on the Security. Although the law is unclear in some respects, a corporate Holder whose Regular Security has Negative OID may be entitled to deduct a loss when and to the extent that its adjusted basis in the Regular Security exceeds the maximum amount of future payments to which the Regular Security entitles it. Similarly, certain non-corporate Holders may be entitled to the same treatment if their Regular Securities are involved in their trade or business. It is unclear whether other non-corporate Holders may claim any tax benefit related to a Regular Security with Negative OID (other than an offset against future positive OID generated by such Security) prior to its maturity. Prospective Holders should consult their own tax advisors with respect to the tax consequences to them of Negative OID.

      (Of course, the usual disclaimer throwing the blame on us!!)

      http://www.ginniemae.gov/text/investors_html/base_offering_circular2003_24.html

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      This message board allows participants to freely exchange ideas and opinions on areas concerning taxes. The comments posted are the opinions of participants and not that of Tax Materials, Inc. We make no claim as to the accuracy of the information and will not be held liable for any damages caused by using such information. Tax Materials, Inc. reserves the right to delete or modify inappropriate postings.

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