Example:
Date | Reference index value |
Oct. 15, 1997 | 100 |
Jan. 1, 1998 | 101 |
Apr. 15, 1998 | 103 |
Oct. 15, 1998 | 105 |
Jan. 1, 1999 | 99 |
OID((n) = AIP(n) * [r + inf(n) + (r * inf(n))]
in which,
r = yield of the debt instrument as determined under paragraph (e)(3)(i) of this section (adjusted for the length of the accrual period);
inf(n) = percentage change in the value of the reference index for period (n) as determined under paragraph (e)(3)(iii) of this section; and
AIP(n) = adjusted issue price at the beginning of period (n).
Example:
Example.
26 C.F.R. §1.1275-7