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Author: Pappys Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35400  
Subject: I Bond Tax issues Date: 3/23/2006 7:55 PM
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I am interested in I bonds and Tips and have read I think every post.

But, I must be missing something.
Sooner or later you are going to use the proceeds of say your I Bonds.

EX fixed 1% + average inflation 4% = 5%

Now 5% - (Fed tax 20% bracket) 1% = 4% which is equal to inflation.

You preserved your capital thats all and in some cases by changing
your tax bracket or the fixed rate or inflation you lose some of
your capital.

I know I have left out some of the steps such as tax protection until
used but I can't see where that will change things much.

As I will admit this is my first attempt to understand fixed income
investments as I have been in stocks/mutual funds. Which after some close scrutiny may not be much better Ha!

Pappys
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