EE Savings Bonds that were reissued after death of original owner
Dear Ms. Savage:
I have many EE bonds maturing over the next few years. I inherited them, and they have been reregistered and placed into my Treasury Direct account. No tax has been paid on the accrued interest.
My current understanding is that the purchase price of new EE bonds is face value. However, at one time, the price was 1/2 face value. Do you know when the change was made? I need to know in order to calculate my federal estimated tax payments.
I thank you for your anticipated response to my inquiry.
Terry Says
Gosh, this is a gray area, or maybe I just don’t understand it. Here’s what it says on the TreasuryDirect website:
You owe tax on the interest the bond earns after it was reissued but when or after you cash the bond, the 1099-INT (see below) will show all interest earned from date of issue, including interest earned before it was reissued. See instructions in IRS Publication 550. for paying tax only on interest earned after the bond was reissued.
This appears to be such conflicting advice! You’ll get a 1099 for ALL the interest — but only declare the interest after the bond was reissued. I researched form 550 — and it is DENSE! Couldn’t find the part about savings bond interest.
I would suggest that you get a CPA to file for you — at least the first year that some bonds mature.
