Under the Original Issue Discount (OID) Rules as Applied to a Three-Year

question 71

Multiple Choice

Under the original issue discount (OID) rules as applied to a three-year certificate of deposit:

• A)All of the income must be recognized in the year of maturity by a cash basis taxpayer.
• B)The OID will be included in gross income for the year of purchase.
• C)The interest income will be the same each year.
• D)The interest income will be greater in the third year than in the first year.
• E)None of these is correct.

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A person who actively questions assumptions, evaluates evidence, and assesses conclusions logically.

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Strongly held systems of ideas and ideals, especially those that form the basis of economic or political theories and policies.

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Metaphysical

Pertaining to the philosophy or theory of reality that is beyond the physical or scientific understanding; dealing with the nature of existence and the universe.