IRS Publication 550 — Investment Income and Expenses
This is the passage the answer relied on, shown in the document's own words. The highlighted text is the exact excerpt quoted — extracted verbatim by the citation system, so it cannot be fabricated.
Open official source at page 44 ↗
“Extension of time to audit claim for credit. The IRS will have 6 years to review and audit claims for the ERC for accuracy. During this time period, the IRS can disallow any or all of an ERC claim and charge penalties to the promoters and taxpayers. The statute of limitations is usually 3 years.”
The holder of a stripped bond has the right to receive the principal (redemption price) payment. The holder of a stripped coupon has the right to receive interest on the bond.
Stripped bonds and stripped coupons include:
• Zero coupon instruments available through the Department of the Treasury's Separate Trading of Registered Interest and Principal of Securities (STRIPS) program and government-sponsored enterprises such as the Resolution Funding Corporation and the Financing Corporation; and
• Instruments backed by U.S. Treasury securities that represent ownership interests in those securities, such as obligations backed by U.S. Treasury bonds offered primarily by brokerage firms.
Seller. If you strip coupons from a bond and sell the bond or coupons, include in income the interest that accrued while you held the bond before the date of sale, to the extent you did not previously include this interest in your income. For an obligation acquired after October 22, 1986, you also must include the market discount that accrued before the date of sale of the stripped bond (or coupon) to the extent you did not previously include this discount in your income.
Add the interest and market discount that you include in income to the basis of the bond and coupons. Allocate this adjusted basis between the items you keep and the items you sell, based on the fair market value of the items. The difference between the sale price of the bond (or coupon) and the allocated basis of the bond (or coupon) is your gain or loss from the sale.
Treat any item you keep as an OID bond originally issued and bought by you on the sale date of the other items. If you keep the bond, treat the amount of the redemption price of the bond that is more than the basis of the bond as OID. If you keep the coupons, treat the amount payable on the coupons that is more than the basis of the coupons as OID. Buyer. If you buy a stripped bond or stripped coupon, treat it as if it were originally issued on the date you buy it. If you buy a stripped bond, treat as OID any excess of the stated redemption price at maturity over your purchase price. If you buy a stripped coupon, treat as OID any excess of the amount payable on the due date of the coupon over your purchase price.
Figuring OID. The rules for figuring OID on stripped bonds and stripped coupons depend on the date the debt instruments were purchased, not the date issued. You must refigure OID shown on the Form 1099 -OID you receive for a stripped bond or coupon. See Pub. 1212 for information about figuring the correct amount of OID on these instruments. Owners of stripped bonds and coupons should not rely on the OID shown in Section II of the OID tables (available by going to IRS.gov and searching for “OID Tables”) because the amounts listed in Section II for stripped bonds or coupons are figured without reference to the date or price at which you acquired them.
Excerpt shown from a longer document — use the official source button above to read the complete publication.