Scenario #1 26 USC 1271; UCC 3-419

IRS Publication 1212, p. 7

For Utilities, Credit Cards, 26 CFR 1.671-5(c) & (d)
Court System
AKA Nominee

1099-A[cquistion] 1099-OID Another 1099-OID by

Tax Return Forms: 1040,
filed on Estate's behalf by received on Estate's Estate receives monthly Nominee for Discharge of
1041, 1120, 706, 709
Nominee behalf to Nominee statements (coupon) from Debt
Nominee requesting
authorization to accept
credits.
FRB is Lender; Transfer credits from Estate accepts and returns Transfers credit from
Refunds credits to Estate
Estate escrow account at for value the statement Nominee's escrow
Estate Bond is the from escrow minus taxes
IRS to Nominee escrow (coupon). account return to Estate's
Borrower rate via a tax return
account escrow account at IRS
Credits are released to
Nominee

Estate is the Payer; Nominee is the Payer;

Nominee is the Recipient Estate is the Recipient
Estate files
1099-A[bandonment]
Check box 5
Estate is Lender Estate must receive
 No additional OID needs to be filed since Nominee has Recipient copy of OID for
already filed OIDs on Estate’s behalf. Once Estate receives Nominee is Borrower
Recipient copy of OID, funds can be claimed on a tax return. tax filing
 For 1099-OID, see 26 USC 6049
 For 1099-A, see 26 USC 6050(j)
 Credits used from Autographs Bank
Scenario #2 Accounts, Promissory Notes & Loans
Applications for Homes, Student , Car
etc.
1099-A Request 1099-OID from Banks
Check Box 5 26 CFR 1.671-5(c) & (d)
Transfers credits from the Transfers credit from bank's
Local bank's account to the escrow account at IRS to
bank's escrow account at the Estate's escrow account at the
IRS IRS
Estate is Lender; Bank is the Payer;
Bank is the Borrower Estate is the Recipient
For Deposits, Endorsements and
Withdrawals Check from Bank
Account
26 USC 163, 163(e) & 12 USC 412
26 CFR 1.671-5(c) & (d)
Tax Forms: 1040, 1041, 1120,
706, 709
Refund credits to Estate(YOU) minus
taxes rate via a tax return
File a 1099-A and receive 1099-OID for
total credits deposit of check, withdrawals
and endorsed from bank account.
Credit cards are OID-able; ATM withdrawals
Includes Digital Autograph
 HOW TO CALCULATE OID FOR A LOAN WITH A MATURITY DATE
Scenario #3 (Ex: Mortgage, Car, Student Loan)

(Stated
Redemption Price)
Stated X (Years to
Redemption Price
@ Maturity
Original Issue Price OID Maturity) X
(0.0025). If
less than OID, then
OID=0

OID
Annual
OID Tax Report for Loans with Payments for
a Maturity Date
26 USC 1273 & 26 USC 1275 OIDs on
Mortgage, Car
Loan or Student
Loan
Years
of Term
 You can amend your tax return up to
3 years using IRS Forms 1040, 1041.
 To file prior to 3 years, use IRS Form
706, 709. Tax Class 5.