Savings Bonds
This is archived information that pertains only to the 2002 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
I cashed some Series E, Series EE and Series I savings bonds, how do I report the interest?
If your total taxable interest for the year is more than $400, you report (and separately identify) the interest on Schedule B of Form 1040 or Schedule 1 of Form 1040A. If your total interest is not more than $400 for the year, report the savings bond interest with your other interest on the "Interest" line of your tax return. If you do not report the increase in the redemption value of the bonds as interest each year, you must report all of the interest in the year they are cashed or otherwise disposed of.
References: How do I determine how much interest to report on U.S. savings bonds I inherited?
You may have choices, but it will depend on several factors. Before your question can be answered, you'll need to know: - the date of death of the deceased,
- the type of bond you inherited (Series EE, Series E, Series I, or Series HH, or Series H),
- whether the deceased was reporting the interest yearly or not, and
- whether any of the interest was included on the decedent's final income tax return.
Once you have these facts, you can find your answer and any options that may be available by reading the appropriate section of Publication 550 (PDF), Investment Income, Chapter 1, or call 800-829-1040.
References: Is deferred interest on a U.S. savings bond (series EE, E, or I) that I inherited taxable to the deceased owner's estate, to the deceased on his or her final tax return, or to me when I cash them?
The deferred interest is not taxable to the estate. It is going to either be reported on the final return of the decedent or be reported by you, depending on the choice you make. If you are the surviving spouse, on the choice made by the executor or administrator of the decedent's estate who is responsible for filing the decedent final return.
You may have choices, but it will depend on several factors. Before your question can be answered, you'll need to know: - the date of death of the deceased,
- the type of bond you inherited (Series EE, Series E, Series I, or Series HH, or Series H),
- whether the deceased was reporting the interest yearly or not, and
- whether any of the interest was included on the decedent's final income tax return.
Once you have these facts, you can find your answer and any options that may be available by reading the appropriate section of Publication 550 (PDF), Investment Income, Chapter 1, or call 800-829-1040.
References: Can interest from some inherited U.S. savings bonds be included on the decedent's final income tax return and interest from other inherited U.S. savings bonds be included as interest to the beneficiary?
The same method of reporting interest must be used for all saving bonds owned by an individual. If the surviving spouse or executor of the decedent's estate elected to report accrual interest on saving owned by the decedent and the decedent had not reported interest on saving bonds prior to their disposition or maturity, the surviving spouse executor of the decedent's estate would be required to treat all savings bonds owned by the decedent the same way. If you receive Series EE or Series I bonds from an estate in satisfaction of a specific dollar amount legacy and the decedent was a cash method taxpayer who did not elect to report interest each year, the interest earned after you receive the bonds is your income. The income earned to the date of death plus any further interest earned to the date of distribution of the bonds to you is income to (and reportable by) the estate. You have a choice. You can report the interest on the series EE or series I bonds, which you received in satisfaction of specific legacy, each year or you can report the interest which accrues from the date the bonds were distributed to you until the date you cash the bonds as interest in the taxable year in which you cash the bonds. If you have other series EE or series I bonds, you will be required to treat the interest on the saving bonds received in satisfaction of the specific legacy in the same way that you treat interest on the other savings bonds.
You may have other choices, that will depend on several factors. Before your question can be answered, you'll need to know: - the date of death of the deceased,
- the type of bond you inherited (Series EE, Series E, Series I, or Series HH, or Series H),
- whether the deceased was reporting the interest yearly or not, and
- whether any of the interest was included on the decedent's final income tax return.
Once you have these facts, you can find your answer and any options that may be available by reading the appropriate section of Publication 550 (PDF), Investment Income, Chapter 1, or call 800-829-1040.
References:
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