Form 8281

What is IRS 8281 Form?

IRS Form 8281, or a document that issuers of certain publicly offered debt instruments must file. The purpose of the IRS 8281 form is to provide information about these public debt instruments, particularly those with OID.

An OID is the excess of an obligation's stated redemption price at maturity over its issue price, and it is effectively a type of interest. The IRS tracks these through the 8281 tax form to ensure accurate taxation. However, it's important to note that IRS 8281 form is not used for reporting tax but only for information purposes.

Who needs to file IRS form 8281?

Any issuer who offers a public debt instrument with an OID in the tax year must file Form 8281. The issuer must file the form no later than 30 days after the date of issuance. This form provides the IRS with essential details about the debt instrument, including the issue date, maturity date, issue price, and yield to maturity. This information helps the IRS ensure correct reporting of OID income by holders of these debt instruments.

How to Fill Out IRS Form 8281

Step 1: Complete the Header

Begin by filling in the header of the IRS 8281 form. This includes your name (or your organization's name if the issuer is a corporation or other entity) and taxpayer identification number (TIN).

Step 2: Describe the Debt Instrument

In the next section, provide a brief description of the debt instrument. Include important details such as whether it's a bond, note, or debenture.

Step 3: Fill in the CUSIP Number

The CUSIP number is a unique identifier for the bond or other debt instrument. If a CUSIP number has not been assigned, leave this section blank.

Step 4: Specify the Issue Date

Enter the date on which the debt instrument was issued. The issue date is typically the date when the issuer received the payment for the instrument.

Step 5: State the Issue Price

The issue price is the original price at which the debt instrument was sold to the public. Include this information in this section.

Step 6: Provide the Stated Redemption Price at Maturity

This is the amount that the issuer must pay to the bondholder or the owner of the debt instrument at its maturity. This will be specified in the instrument's terms.

Step 7: Indicate the Yield to Maturity

This is the total return anticipated on a bond if it is held until it matures. Yield to maturity is expressed as an annual percentage rate (APR).

Step 8: Specify the Description of the Maturity Schedule

Here, describe the schedule of how the bond or other debt instrument matures. This should include the dates and amounts of any scheduled payments of principal or interest.

Step 9: Fill in Other Details (if applicable)

If there are any additional features or terms of the debt instrument not included above, provide those details in this section.

Step 10: Sign and Date the Form

After filling out the entire IRS Form 8281, sign and date it at the bottom. This verifies that all the information provided is accurate to the best of your knowledge.

Step 11: File the Form

Lastly, submit the completed IRS 8281 form. You must do this no later than 30 days after the date of the issuance of the debt instrument. The form can be filed electronically or mailed to the IRS.