Instructions for IRS Form 1040 Schedule B - Interest and Ordinary Dividends 2018

October 22, 2018 "Instructions For Irs Form 1040 Schedule B - Interest And Ordinary Dividends" contain the latest filing requirements for the IRS-issued Form 1040. Download your copy of the instructions by clicking the link below.

IRS Form 1040 is a tax form issued by the United States Internal Revenue Service.

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Department of the Treasury
Internal Revenue Service
2018 Instructions for Schedule B
(Form 1040)
Interest and
Use Schedule B (Form 1040) if any of the following applies.
You had over $1,500 of taxable interest or ordinary dividends.
Ordinary
You received interest from a seller-financed mortgage and the buyer used the
property as a personal residence.
Dividends
You have accrued interest from a bond.
You are reporting original issue discount (OID) of less than the amount shown
on Form 1099-OID.
You are reporting interest income of less than the amount shown on a Form 1099
due to amortizable bond premium.
You are claiming the exclusion of interest from series EE or I U.S. savings bonds
issued after 1989.
You received interest or ordinary dividends as a nominee.
You had a financial interest in, or signature authority over, a financial account in
a foreign country or you received a distribution from, or were a grantor of, or transfer-
or to, a foreign trust.
Section references are to the Internal
tute statements. Include interest from
uted some or all of this income to others.
Revenue Code unless otherwise noted.
series EE, H, HH, and I U.S. savings
Under your last entry on line 1, put a
bonds. Also include any accrued market
subtotal of all interest listed on line 1.
Future Developments
discount that is includible in income and
Below this subtotal, enter “Nominee
any gain on a contingent payment debt
Distribution” and show the total interest
For the latest information about devel-
instrument that is includible in income
you received as a nominee. Subtract this
opments related to Schedule B (Form
as interest income. List each payer’s
amount from the subtotal and enter the
1040) and its instructions, such as legis-
name and the amount. Don't report on
result on line 2.
lation enacted after they were published,
line 1 any tax-exempt interest. See
go to IRS.gov/ScheduleB.
If you received interest as a
Tax-exempt
interest, later, for more in-
nominee, you must give the ac-
TIP
formation.
tual owner a Form 1099-INT
Specific
For more information on stated inter-
(unless the owner is your spouse) and
est, original issue discount (OID), mar-
Instructions
file Forms 1096 and 1099-INT with the
ket discount, contingent payment debt
IRS. For more details, see the General
instruments, and premium, see Pub. 550
Instructions for Certain Information Re-
You can list more than one pay-
and Pub. 1212.
turns and the Instructions for Forms
er on each entry space for lines
TIP
1099-INT and 1099-OID.
Seller-financed mortgages. If you
1 and 5, but be sure to clearly
sold your home or other property and
show the amount paid next to each pay-
Accrued interest. When you buy
the buyer used the property as a personal
er’s name. Add the separate amounts
bonds between interest payment dates
residence, list first any interest the buyer
paid by the payers listed on an entry
and pay accrued interest to the seller,
paid you on a mortgage or other form of
space and enter the total in the
this interest is taxable to the seller. If
seller financing. Be sure to show the
“Amount” column. If you still need
you received a Form 1099 for interest as
buyer’s name, address, and SSN. You
more space, attach separate statements
a purchaser of a bond with accrued in-
also must let the buyer know your SSN.
using the same format as lines 1 and 5,
terest, follow the rules earlier under
If you don't show the buyer’s name, ad-
but show your totals on Schedule B. Put
Nominees
to see how to report the ac-
dress, and SSN, or let the buyer know
your name and social security number
crued interest. But identify the amount
your SSN, you may have to pay a $50
(SSN) on the statements and attach them
to be subtracted as “Accrued Interest.”
penalty.
at the end of your return.
Original issue discount (OID). If
Nominees. If you received a Form
Part I. Interest
you are reporting OID in an amount less
1099-INT that includes interest you re-
than the amount shown in box 1 or
ceived as a nominee (that is, in your
Line 1. Report on line 1 all of your tax-
box 8 of Form 1099-OID, follow the
name, but the interest actually belongs
able interest. Taxable interest generally
rules earlier under
Nominees
to see how
to someone else), report the total on
should be shown on your Forms
to report the OID. But identify the
line 1. Do this even if you later distrib-
1099-INT, Forms 1099-OID, or substi-
B-1
Oct 22, 2018
Cat. No. 70541Y
Department of the Treasury
Internal Revenue Service
2018 Instructions for Schedule B
(Form 1040)
Interest and
Use Schedule B (Form 1040) if any of the following applies.
You had over $1,500 of taxable interest or ordinary dividends.
Ordinary
You received interest from a seller-financed mortgage and the buyer used the
property as a personal residence.
Dividends
You have accrued interest from a bond.
You are reporting original issue discount (OID) of less than the amount shown
on Form 1099-OID.
You are reporting interest income of less than the amount shown on a Form 1099
due to amortizable bond premium.
You are claiming the exclusion of interest from series EE or I U.S. savings bonds
issued after 1989.
You received interest or ordinary dividends as a nominee.
You had a financial interest in, or signature authority over, a financial account in
a foreign country or you received a distribution from, or were a grantor of, or transfer-
or to, a foreign trust.
Section references are to the Internal
tute statements. Include interest from
uted some or all of this income to others.
Revenue Code unless otherwise noted.
series EE, H, HH, and I U.S. savings
Under your last entry on line 1, put a
bonds. Also include any accrued market
subtotal of all interest listed on line 1.
Future Developments
discount that is includible in income and
Below this subtotal, enter “Nominee
any gain on a contingent payment debt
Distribution” and show the total interest
For the latest information about devel-
instrument that is includible in income
you received as a nominee. Subtract this
opments related to Schedule B (Form
as interest income. List each payer’s
amount from the subtotal and enter the
1040) and its instructions, such as legis-
name and the amount. Don't report on
result on line 2.
lation enacted after they were published,
line 1 any tax-exempt interest. See
go to IRS.gov/ScheduleB.
If you received interest as a
Tax-exempt
interest, later, for more in-
nominee, you must give the ac-
TIP
formation.
tual owner a Form 1099-INT
Specific
For more information on stated inter-
(unless the owner is your spouse) and
est, original issue discount (OID), mar-
Instructions
file Forms 1096 and 1099-INT with the
ket discount, contingent payment debt
IRS. For more details, see the General
instruments, and premium, see Pub. 550
Instructions for Certain Information Re-
You can list more than one pay-
and Pub. 1212.
turns and the Instructions for Forms
er on each entry space for lines
TIP
1099-INT and 1099-OID.
Seller-financed mortgages. If you
1 and 5, but be sure to clearly
sold your home or other property and
show the amount paid next to each pay-
Accrued interest. When you buy
the buyer used the property as a personal
er’s name. Add the separate amounts
bonds between interest payment dates
residence, list first any interest the buyer
paid by the payers listed on an entry
and pay accrued interest to the seller,
paid you on a mortgage or other form of
space and enter the total in the
this interest is taxable to the seller. If
seller financing. Be sure to show the
“Amount” column. If you still need
you received a Form 1099 for interest as
buyer’s name, address, and SSN. You
more space, attach separate statements
a purchaser of a bond with accrued in-
also must let the buyer know your SSN.
using the same format as lines 1 and 5,
terest, follow the rules earlier under
If you don't show the buyer’s name, ad-
but show your totals on Schedule B. Put
Nominees
to see how to report the ac-
dress, and SSN, or let the buyer know
your name and social security number
crued interest. But identify the amount
your SSN, you may have to pay a $50
(SSN) on the statements and attach them
to be subtracted as “Accrued Interest.”
penalty.
at the end of your return.
Original issue discount (OID). If
Nominees. If you received a Form
Part I. Interest
you are reporting OID in an amount less
1099-INT that includes interest you re-
than the amount shown in box 1 or
ceived as a nominee (that is, in your
Line 1. Report on line 1 all of your tax-
box 8 of Form 1099-OID, follow the
name, but the interest actually belongs
able interest. Taxable interest generally
rules earlier under
Nominees
to see how
to someone else), report the total on
should be shown on your Forms
to report the OID. But identify the
line 1. Do this even if you later distrib-
1099-INT, Forms 1099-OID, or substi-
B-1
Oct 22, 2018
Cat. No. 70541Y
Part III. Foreign Accounts
amount to be subtracted as “OID Adjust-
If an amount is shown in box 9 of
ment.” However, if the payer reported to
Form 1099-INT, you generally must re-
and Trusts
you a net amount of OID on the bond re-
port it on line 2g of Form 6251. See the
flecting the offset of the gross amount of
Instructions for Form 6251 at
IRS.gov/
Regardless of whether you are
OID by any acquisition premium, no re-
Form6251
for details.
required to file FinCEN Form
TIP
duction of the amount of OID income
114 (FBAR), you may be re-
Line 3. If, during 2018, you cashed ser-
reported to you by the payer may be
quired to file Form 8938, Statement of
ies EE or I U.S. savings bonds issued af-
needed on Schedule B for the bond.
Specified Foreign Financial Assets, with
ter 1989 and you paid qualified higher
your income tax return. Failure to file
education expenses for yourself, your
Amortizable bond premium. If you
Form 8938 may result in penalties and
spouse, or your dependents, you may be
elect to reduce your interest income on a
extension of the statute of limitations.
able to exclude part or all of the interest
taxable bond by the amount of taxable
See
IRS.gov/Form8938
for more infor-
on those bonds. See Form 8815 at
amortizable bond premium, follow the
mation.
IRS.gov/Form8815
for details.
rules earlier under
Nominees
to see how
Part II. Ordinary Dividends
to report the interest. But identify the
Line 7a–Question 1. Check the “Yes”
amount to be subtracted as “ABP Ad-
box if at any time during 2018 you had a
You may have to file Form
justment.” However, if the payer repor-
financial interest in or signature authori-
5471 if, in 2018, you were an
ted to you a net amount of interest in-
TIP
ty over a financial account located in a
officer or director of a foreign
come on the bond reflecting the offset of
foreign country. See the definitions that
corporation. You also may have to file
the gross amount of interest income by
follow. Check the “Yes” box even if you
Form 5471 if, in 2018, you owned 10%
the amortizable bond premium, no re-
aren't required to file FinCEN Form 114.
or more of the total (a) value of a for-
duction of the amount of interest income
Financial account. A financial ac-
eign corporation’s stock, or (b) com-
reported to you by the payer is needed
count includes, but isn't limited to, a se-
bined voting power of all classes of a
on Schedule B for the bond.
curities, brokerage, savings, demand,
foreign corporation’s stock with voting
Tax-exempt interest. If you received
checking, deposit, time deposit, or other
rights. For details, see Form 5471 and
any tax-exempt interest (including any
account maintained with a financial in-
its instructions at IRS.gov/Form5471.
tax-exempt OID), such as from munici-
stitution (or other person performing the
pal bonds, each payer should send you a
Line 5. Report on line 5 all of your or-
services of a financial institution). A fi-
Form 1099-INT or a Form 1099-OID. In
dinary dividends. This amount should be
nancial account also includes a com-
general, your tax-exempt stated interest
shown in box 1a of your Forms
modity futures or options account, an in-
should be shown in box 8 of Form
1099-DIV or substitute statements.
surance policy with a cash value (such
1099-INT or, for a tax-exempt OID
as a whole life insurance policy), an an-
Nominees. If you received a Form
bond, in box 2 of Form 1099-OID, and
nuity policy with a cash value, and
1099-DIV that includes ordinary divi-
your tax-exempt OID should be shown
shares in a mutual fund or similar
dends you received as a nominee (that
in box 11 of Form 1099-OID. Enter the
pooled fund (that is, a fund that is avail-
is, in your name, but the ordinary divi-
total on line 2a of your Form 1040.
able to the general public with a regular
dends actually belong to someone else),
However, if you acquired a tax-exempt
net asset value determination and regu-
report the total on line 5. Do this even if
bond at a premium, only report the net
lar redemptions).
you later distributed some or all of this
amount of tax-exempt interest on line 2a
income to others. Under your last entry
Financial account located in a for-
of your Form 1040 (that is, the excess of
on line 5, put a subtotal of all ordinary
eign country. A financial account is lo-
the tax-exempt interest received during
dividends listed on line 5. Below this
cated in a foreign country if the account
the year over the amortized bond premi-
subtotal, enter “Nominee Distribution”
is physically located outside of the Uni-
um for the year). Also, if you acquired a
and show the total ordinary dividends
ted States. For example, an account
tax-exempt OID bond at an acquisition
you received as a nominee. Subtract this
maintained with a branch of a United
premium, only report the net amount of
amount from the subtotal and enter the
States bank that is physically located
tax-exempt OID on line 2a of your Form
result on line 6.
outside of the United States is a foreign
1040 (that is, the excess of the tax-ex-
financial account. An account main-
empt OID for the year over the amor-
If you received dividends as a
tained with a branch of a foreign bank
tized acquisition premium for the year).
nominee, you must give the ac-
TIP
that is physically located in the United
See Pub. 550 for more information
tual owner a Form 1099-DIV
States isn't a foreign financial account.
about OID, bond premium, and acquisi-
(unless the owner is your spouse) and
tion premium.
file Forms 1096 and 1099-DIV with the
Signature authority. Signature au-
IRS. For more details, see the General
Also include on line 2a of your Form
thority is the authority of an individual
Instructions for Certain Information Re-
1040, any exempt-interest dividends
(alone or in conjunction with another in-
turns and the Instructions for Form
from a mutual fund or other regulated
dividual) to control the disposition of as-
1099-DIV.
investment
company.
This
amount
sets held in a foreign financial account
should be shown in box 11 of Form
by direct communication (whether in
1099-DIV.
writing or otherwise) to the bank or oth-
er financial institution that maintains the
B-2
financial account. See the FinCEN Form
file the form if the aggregate value of
provided on line 7b. Attach a separate
114 instructions for exceptions. Don't
foreign
financial
accounts
exceeds
statement if you need more space.
consider the exceptions relating to sig-
$10,000 at any time during 2018. Do
Line 8. If you received a distribution
nature authority in answering Question 1
not attach FinCEN Form 114 to your tax
from a foreign trust, you must provide
on line 7a.
return.
additional information. For this purpose,
For the due date and more informa-
a loan of cash or marketable securities
Other definitions. For definitions of
tion about FinCEN Form 114, see
generally is considered to be a distribu-
“financial interest,” “United States,” and
www.fincen.gov.
tion. See the Instructions for Form 3520
other relevant terms, see the instructions
at
IRS.gov/Form3520
for details.
for FinCEN Form 114.
If you are required to file Fin-
!
If you were the grantor of, or trans-
CEN Form 114 but don't prop-
Line 7a–Question 2. See FinCEN
feror to, a foreign trust that existed dur-
erly do so, you may have to pay
Form 114 and its instructions at
CAUTION
ing 2018, you may have to file Form
a civil penalty up to $10,000. A person
www.fincen.gov
to determine whether
3520.
who willfully fails to report an account
you must file the form. Check the “Yes”
or provide account identifying informa-
box if you are required to file the form.
Don't attach Form 3520 to Form
tion may be subject to a civil penalty
Check the “No” box if you aren't re-
1040. Instead, file it at the address
equal to the greater of $100,000 or 50%
quired to file the form.
shown in its instructions.
of the balance in the account at the time
If you checked the “Yes” box to
If you were treated as the owner of a
of the violation. Willful violations also
Question 2 on line 7a, you must elec-
foreign trust under the grantor trust
may be subject to criminal penalties.
tronically file FinCEN Form 114 with
rules, you also are responsible for ensur-
Treasury's Financial Crimes Enforce-
ing that the foreign trust files Form
Line 7b. If you are required to file Fin-
ment Network. A U.S. person that has a
3520-A. Form 3520-A is due on March
CEN Form 114, enter the name of the
financial interest in or signature authori-
15, 2019, for a calendar year trust. See
foreign country or countries in the space
ty over foreign financial accounts must
the Instructions for Form 3520-A at
IRS.gov/Form3520A
for details.
B-3

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