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Author: alglen One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: ee bonds tax rate Date: 11/18/1998 10:35 PM
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A quick question..

Do EE Savings Bonds that have been cashed in after being held more than a year get taxed at the 20% rate?

thanks
ag
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Author: gapfan Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6382 of 121585
Subject: Re: ee bonds tax rate Date: 11/19/1998 3:35 AM
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<<<Do EE Savings Bonds that have been cashed in after being held more than a year get taxed at the 20% rate?>>>

No, bonds pay interest and that is taxed as ordinary income. It can be declared yearly or deferred until cashing. You cannot switch between the two methods.

gapfan :-)

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Author: TMFTaxes Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6390 of 121585
Subject: Re: ee bonds tax rate Date: 11/19/1998 7:29 PM
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[[Do EE Savings Bonds that have been cashed in after being held more than a year get taxed at the
20% rate?]]

As GapFan points out in his post, the only real component of EE bonds is the accrued interest. This being the case, when you cash them out, what you are really receiving is interest only, which will be taxed to you as interest, and on which you'll pay tax at your "normal" tax rate.

Now, then, other bonds (such as corporate bonds), may have both an interest and capital appreciation component...and the rules would be different for them.

TMF Taxes
Roy

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