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?thanksag
<<<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 :-)
[[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 TaxesRoyWant to learn more about taxes and investing? Then we have a deal for you!! The Motley Fool Investment Tax Guide is now available through Fool Mart. Be the first one on your block to own this masterpiece. There is still time available to do that tax planning (and tax saving) before the end of the year. So just click on this link (http://www.foolmart.com/market/product.asp?pfid=MF+013+I) to read more about this amazing collection of tax information. (Apologies for the shameless plug…but it is a pretty good book…if I do say so myself). In addition, if you would like to visit the Taxes FAQ (Frequently Asked Questions) area, click on http://www.fool.com/school/taxes/taxes.htm and you'll be right at the home page. Pay special attention to the "archives" section. Check it out. Finally, if you need to get to the IRS web site, click on http://www.irs.ustreas.gov to go directly there.
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