Tax Forms

• Lines 1, 2, 3, and 8 must be completed. If any of those lines are incomplete, a new form is required with those lines completed. If the information on these lines is inconsistent with other account documentation or systems information, additional documentation will be required.
• If your mailing address contains a U.S. address, you must provide a copy of your current passport or other type of foreign government issued document that confirms your foreign tax residency status. In addition, you must provide a letter of explanation as to why you are using a U.S. address.
• If your permanent or mailing address is different from the treaty country listed in Part II, you will be required to provide additional documentation or a statement supporting your claim of residency in the treaty country.
• If you are the single member owner of a limited liability company that is disregarded, you complete the Form W-8BEN based on your individual status, and put the disregarded entity name in Line 3. We are required to report the income to the single member owner on IRS Form 1042-S and not to the disregarded entity.
• The form must be signed and dated. The “Capacity in which acting” line may be left blank if you are the beneficial owner of the income. If you are signing on behalf of the beneficial owner, please provide documents supporting your capacity (for example, a power of attorney document that specifically allows you to sign the certifications under penalties of perjury or an IRS Form 2848 in lieu of the POA document).
• Part II; To make a valid treaty claim, Part II must be completed. Failure to complete Part II does not make the form invalid in terms of certifying your foreign tax residency, but you will not be provided any treaty rate benefits.
  

• Lines 1, 2, 4, 5, 6, 7 and 11 must be completed by entities. Individuals must also complete Line 10.
• In order to receive exemption from withholding on your income effectively connected with a trade or business in the U.S., this form must include a mailing address in the U.S., a U.S. taxpayer ID number (e.g., either an EIN or SSN), and list the specific type of income for which you are claiming the exemption (for example, interest on debt obligations, bank deposit interest, dividend distributions, royalty income, syndicated loan payment or description of each type of fee). A general description such as “FDAP income” will be rejected.
• The form must be signed and dated, and the capacity box” must be checked. See the comments to the right for the Form W-8BEN if you are an “Attorney-in-Fact” signing on behalf of the beneficial owner.

• This form is completed by entities that are the beneficial owner of the income, such as corporations, complex trusts and foreign estates. Most other entities complete this form only if they are eligible to make a treaty claim based on their tax status in their foreign country and specific treaty provisions. You must still provide the applicable type of Form W-8 (for example, the Form W-8IMY for a foreign partnership or foreign trust, along with the other documentation mentioned under the Form W-8IMY requirements) in addition to providing a Form W-8BEN-E solely to make a treaty claim because we must confirm your FATCA compliant status since FATCA withholding would override any treaty claim.
• Part I: Lines 1, 2, 4, 5 and 6 must be completed by every entity. If any of those lines are incomplete, you must provide a new form with those lines completed. If the information is inconsistent with other account documentation or systems information, you will be required to provide additional documentation to reconcile the difference.
• Line 5 – Chapter 4 (FATCA status) is new and required for any new account opened on or after January 1, 2015. Since this status is based on your specific business activities, as well as how you are defined under the FATCA regulations or IGA definitions, you must consult with your tax advisor about which box to check. If you are an entity that must register with the IRS and obtain a GIIN, that number must be provided in Line 9a. WARNING: See the IRS instructions for this form about the correct box to check if you are a FFI that is registered with the IRS as a RDCFFI and you are located in a Model 1 IGA country or you are a FFI that is registered with the IRS as a PFFI and you are located in a Model 2 IGA country.
• Wells Fargo must obtain copies of your articles of incorporation, a certificate of incorporation, or other type of organizational document confirming the entity is organized outside the U.S. and consistent with the information provided on the form, if any of the following situations occur:
  • If line 2 (Country of Incorporation) is different than the country listed on line 6.
  • If you provide a U.S. mailing address, or such an address exists in any account documentation or system information.
  • If the treaty country listed in Part II is different from your permanent residence address or mailing address, you must provide additional documentation or a letter of explanation confirming you have the required tax residency in the treaty country.
• Part II: If the account is opened by a branch or disregarded entity of a FFI named in Part I, and that branch or disregarded entity is located in a different country from the FFI listed in Part I, then you must complete Part II.
• Part III; To make a valid treaty claim, all of the applicable boxes in Part III must be checked and completed. Failure to complete Part III does not make the form invalid in terms of certifying your foreign tax residency, but you will not be provided any treaty rate benefits.
• Parts IV through XXVIII and XXX: Based on the type of FATCA status box checked on Line 5, you may be required to complete one of these parts. Failure to do so will result in the form being invalid.
• Part XXIX: The form must be signed, dated, and the signer must check the capacity box. Failure to sign the document and check the capacity box, or modifying or limiting the certification statements will result in the form being rejected.

• This form is completed by entities that, based on various U.S. federal tax statutes, are exempt from Chapter 3 withholding because of their special status. They are exempt from Chapter 4/FATCA withholding if they validate their FATCA compliance on this form.
• Part I: Lines 1, 2, 3, 4, and 5 must be completed by all entities.
• Wells Fargo must obtain copies of your articles of incorporation, a certificate of incorporation, or other type of organizational document confirming the entity is organized outside the U.S. and consistent with the information provided on the form, if any of the following situations occur:
  • If line 2 (Country of Incorporation) is different than the country listed on line 6.
  • If you provide a U.S. mailing address, or such an address exists in any account documentation or system information.
• Line 4 – Chapter 4 (FATCA status) is new and required for any new account opened on or after January 1, 2015. Since this status is based on your specific business activities, as well as how you are defined under the FATCA regulations or IGA definitions, you must consult with your tax advisor about which box to check. If you are an entity that must register with the IRS and obtain a GIIN, that number must be provided in Line 8a. WARNING: See the IRS instructions for this form about the correct box to check if you are a FFI that is registered with the IRS as a RDCFFI and you are located in a Model 1 IGA country or you are a FFI that is registered with the IRS as a PFFI and you are located in a Model 2 IGA country.
• Part II – additional Chapter 3 status certifications: Foreign tax exempt organizations, foreign private foundations and governments of a U.S. possession must complete the applicable line in this part. If a U.S. tax counsel opinion letter regarding your tax-exempt status is being provided, it must be included with the form.
• Part III – additional Chapter 4 status certifications: Based on the box checked in Line 4, the applicable line in Part III must be completed.
• Part IV: The form must be signed, dated, and the signer must check the capacity box. Failure to sign the document and check the capacity box, or modifying or limiting the certification statements will result in the form being rejected.

• This form is completed by entities or persons acting as either an intermediary or flow-through entity that is accepting a payment on behalf of the beneficial owner of the income. The IRS expects non-withholding foreign trusts and non-withholding foreign partnerships to provide copies of the tax certification documentation for each grantor, beneficiary or partner, because the withholding agent is required to review that documentation and confirm it is valid so that the Form 1042-S reporting to each of those beneficial owners is accurate.
• IN ADDITION TO THIS FORM, YOU WILL ALMOST ALWAYS BE REQUIRED TO PROVIDE A WITHHOLDING STATEMENT AND COPIES OF THE CURRENTLY VALID TAX CERTIFICATION DOCUMENTATION OF THE UNDERLYING BENEFICIAL OWNERS. THESE DOCUMENTS ARE CONSIDERED AN INTEGRAL PART OF THE FORM W-8IMY. SOME EXCEPTIONS APPLY – SEE THE IRS INSTRUCTIONS FOR THIS FORM. SEE THE SAMPLE WITHHOLDING STATEMENTS BELOW.
• Part I: Lines 1, 2, 4, 5 and 6must be completed by all entities.
• Wells Fargo must obtain copies of your articles of incorporation, a certificate of incorporation, or other type of organizational document confirming the entity is organized outside the U.S. and consistent with the information provided on the form, if any of the following situations occur:
  • If line 2 (Country of Incorporation) is different than the country listed on line 6.
  • If you provide a U.S. mailing address, or such an address exists in any account documentation or system information.
• Line 5 – Chapter 4 (FATCA status) is new and required for any new account opened on or after January 1, 2015. Since this status is based on your specific business activities, as well as how you are defined under the FATCA regulations or IGA definitions, you must consult with your tax advisor about which box to check. If you are an entity that must register with the IRS and obtain a GIIN, that number must be provided in Line 9. WARNING: See the IRS instructions for this form about the correct box to check if you are a FFI that is registered with the IRS as a RDCFFI and you are located in a Model 1 IGA country or you are a FFI that is registered with the IRS as a PFFI and you are located in a Model 2 IGA country.
• Part I – Line 8: The applicable type of U.S. issued TIN must be provided by certain entities, such as qualified intermediaries, withholding foreign partnerships and withholding foreign trusts.
• Part II: If the account is opened by a branch or disregarded entity of a FFI named in Part I, and that branch or disregarded entity is located in a different country from the FFI listed in Part I, then you must complete Part II.
• Parts III through VIII: Based on the type of Chapter 3 status box checked in Line 4, one of these parts must be completed.
• Parts IX through XXVII: Based on the type of Chapter 4 status box checked in Line 5, one of these parts must be completed.
• Part XXVIII: The W-8IMY form must be signed and dated. Failure to sign the document, or modifying or limiting the certification statements will result in the form being rejected.
• NOTE: While the Form W-8IMY itself has an indefinite validity period (assuming there is no change in circumstances from what is provided on the form), the underlying tax certification documentation for the underlying beneficial owners does not have an indefinite validity period.

• Recalcitrant Pool – No U.S. Indicia
• Recalcitrant Pool – U.S. Indicia
• Recalcitrant Pool – Dormant/Escrow Accounts
• Recalcitrant Pool – U.S. Persons
• Recalcitrant Pool – Passive NFFEs
• QI-Recalcitrant Pool – General
• NPFFI Pool

• Foreign Payee Pools:
  • 30% Chapter 3 Withholding Rate Pool
  • 0% Chapter 3 Withholding Rate Pool
  • Applicable Treaty Rate Chapter 3 Withholding Pools (e.g., 15%, 10%, etc.)
• US Payee Pools:
  • Chapter 4 Withholding Rate Pool of US Payees (only permissible for QIs that are a type of PFFI or RDCFFI)
  • U.S. Non-Exempt Payees subject to Form 1099 Reporting but not 28% backup withholding
  • U.S. Non-Exempt Payees subject to Form 1099 reporting and 28% backup withholding
  • U.S. Exempt Payees not subject to Form 1099 reporting and backup withholding.

Deferred to date of sale, redemption, maturity, or other disposition.

Therefore, the broker does not adjust the cost basis of the debt instrument on the Form 1099-B for the deferred amount of market discount. Instead, the broker reports the total accrued market discount amount in Box 1g and the taxpayer must complete a worksheet for IRS Form 8949 to determine what amount to recognize as income (if any) and what amount to recognize as gain.

Current inclusion as income.

If current recognition is elected, the broker will report the market discount on the Form 1099-INT for that year and increase the basis of the debt instrument.

For debt instruments acquired on or after 1/1/2015: Constant interest (a/k/a constant yield) rate.

This rate results in upward curve with lower amounts than straight line in the earlier years.

Calculation requires use of yield method similar to OID accrual calculations under IRC §1272(a), which are applied to the bond as if it had been originally issued on the date it was acquired by the taxpayer. The taxpayer's basis in the bond immediately after acquired is treated as the bond's issue price.

For debt instruments acquired in 2014: Ratable accrual (a/k/a, straight line): Total market discount at purchase / # of remaining days to maturity.