Tax implications of Series EE Savings Bonds?

The person paid the interest owes tax on it. The interest is not taxable on your state income tax return.

Series Ee Bonds Tax

Cashing In Ee Bonds

Matured Series EE/E Savings Bonds

All Series E savings bonds stopped earning interest as of June 2010. Additionally, Series EE bonds issued from January 1980 through November 1982 are no longer earning interest, and those issued from December 1982 through April 1983 will stop earning interest during the next six months.

http://www.treasurydirect.gov/news/pressroom/curre...

Would NOT be any amount of capital gains on this type of a savings bond ONLY TAXABLE interest for this purpose and time in life and would not be subject to state income tax at all for that tax year.

The bonds will have some ones social security number on them for this purpose and time in your life.

30 year bonds no longer earning any interest at this time in series EE savings bonds. When cashed in during that tax year the taxpayers social security number that will be on the 1099-INT that will be received after the end of the tax year will be the taxpayer that will have to report the interest income which is UNEARNED income that was NOT worked for to be able to recieve it and the amount will be added to all of the other income on the 1040 income tax return and subject to FIT amounts at the taxpayers marginal tax rate bracket amount during the tax filing season for the past tax year.

Hope that you find the above enclosed information useful. 11/14/2012

There is no capital gains tax on Series EE Savings Bonds. On Series EE Savings bonds, you pay only regular federal income tax. No state tax, and no capital gains tax.

If it has both your names on it, it was NOT a gift to you. If only your name was on it, then it would be a gift.

Either one of you can cash them in, but from the IRS's point of view, mom put up the money, so any interest income is hers to declare on her taxes. The "gift" is as of the moment after you cashed them in.

If mom dies, then the interest is your income. (Unless you want to declare the interest up through her death on her final return.)

All of the above is stated explicitly in IRS publication 550.

Also check the dates on those bonds. 1980, 1981 were already due on prior year returns.

not cap gains it is interest income and it won't matter when you cash them in, it will still depend on your rate of taxation at the time you do

All U S Savings Bonds mature in 30 years, and the interest becomes taxable at that time, even if the bonds are not redeemed. If these bonds are older than 30 yrs, tax due will also be assessed a late fee, and could also be subject to a penalty.

Interest is taxable at ordinary rates, not capital gain rates. If you and your Mom's name appear on the bond, then you are co owners, unless you are only named as a beneficiary. As co owners, you share the proceeds and any tax and penalty due.

But if you receive the entire proceeds, then in all fairness you should pay the tax and penalties, not your Mom.

If they are still earning interest you can hang on to them if you wish. Savings Bonds are not subject to capital gains taxes.

If you didn't claim the interest income as it accrued each year (most folks are unaware that you can do this) then the difference between the redemption amount and the original purchase price is taxed as interest income at your marginal tax rate in the year that you cash them in.

If the bonds are in joint name, you are each liable for 1/2 of the taxes. However bonds given as a gift to a child should show the parent as custodian for the child, in which case the income is the child's income alone.

Savings bond interest is taxed as ordinary income. It is not taxed as a capital gain so the possible increase in the capital gains rate would have no effect.