On Mar 9, 3:04 pm, spop...[at]speedymail.org (Steve Pope) wrote:

- quote -

You're right. Thanks for the info. I see it here
http://www.irs.gov/publications/p550...ublink10009982.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

removeps-groups[at]yahoo.com <removeps-groups[at]yahoo.com> wrote:

- quote -

I believe that OID is always reported each year you hold a bond,
regardless of any election, whereas market discount is subject to
a discretionary election.

Steve

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Mar 7, 4:03 pm, jay1000 <jfschonSpamgu...[at]cox.net> wrote:

- quote -

Did you purchase the bonds at a discount? If so, and you've made an
election to amortize all your taxable bonds, then you report the OID
as interest and increase the cost basis of your holdings each year.
If you disposed of the bond (your broker may have a form to dispose of
worthless securities) you can claim a capital loss -- but be sure to
use the higher adjusted cost basis.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

jay1000 <jfschonSpamguarD[at]cox.net> wrote:

- quote -

Not that I know of. I'm in a similar but not identical situation,
having bought Washington Mutual bonds which made three interest
payments before becoming worthless. I would like to be able
to call these interest payments a constructive return of capital,
but I cannot. So far as I know.

Steve

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

I have some Variable Rate Lehman Notes - now worthless. My broker
report says I owe OID on these bonds. It's like a double kick! Do I
actually have to pay OID on worthless bonds? If not, is there any
chance of recovering the OID from prior years?

Thanks

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >