The National Directory of Certified Public Accountants

Ask A CPA - Investments & Financial Planning

What Is Bond OID Accretion ?

The difference between the discounted purchase price and the value at maturity is the return or yield on the bond and is called accretion. A bond's accretion must be calculated annually and this amount must be reported to the IRS as income on Form 1099. OID bonds are generally issued at a low or zero coupon and are issued at a deep discount relative to the bond's par value.

If you need professional help with "Investments & Financial Planning" or have other tax questions, we can help you find a local licensed CPA for a free, no-obligation consultation.