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Author: BOBBIHD Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19257  
Subject: USA EE BONDS Date: 6/22/2001 9:53 PM
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WE HAVE 1980s GOV'T USA EE BONDS -- HOW CAN WE SAVE ON IRS TAXES ? WE ARE 77 YRs OLD
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Author: ibnana Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6944 of 19257
Subject: Re: USA EE BONDS Date: 6/22/2001 10:13 PM
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I don't know of any way you can avoid paying income tax on the interest when you cash in the bonds. If you bought them before Oct. of 1986, they have not been paying paying the original high interest since 1996.

There are two times each year when it is best to cash them. Make sure you do so right after the six months dates of the purchase so you don't lose any interest. If you cash them before the calendar dates you could lose that six months interest.

You can go to the bond site to see what interest they are paying at this time. If you enter the date of purchase, it will tell you what they are worth right now.

http://www.publicdebt.treas.gov/sav/sav.htm

Carol

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Author: rjm1 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6947 of 19257
Subject: Re: USA EE BONDS Date: 6/23/2001 11:18 AM
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WE HAVE 1980s GOV'T USA EE BONDS -- HOW CAN WE SAVE ON IRS TAXES ? WE ARE 77 YRs OLD

Check out conversion to HH BONDS

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Author: ibnana Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6948 of 19257
Subject: Re: USA EE BONDS Date: 6/23/2001 12:17 PM
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Check out conversion to HH BONDS

According to the USTreas. website, the exchange muct be made within a year of the EE bonds maturing. If the bonds were purchased in the 1980s, wouldn't they be way past the maturity date? If they were purchased before Nov. 1986, they had a ten year maturity date. Purchased after Nov. 1986 until 1993, the maturity date was 12 years.

http://www.publicdebt.treas.gov/sav/savoldee.htm

http://www.publicdebt.treas.gov/sav/sbhexchg.htm

Carol

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Author: ibnana Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6952 of 19257
Subject: Re: USA EE BONDS Date: 6/23/2001 1:05 PM
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OK, I've gone to the website and entered an Oct. 1986 date into the calculator. It showed that the bond has not matured yet, so it could be converted to a HH. I guess the Treas. meant the extended maturity when it said it could be converted within a year.

Right now EE bonds purchased in Aug. and Oct.1986 are earning 4.5% which is not bad considering. Also there is no state income tax on that.

I have quite a few of those bonds, inherited and purchased, which is why I had recently looked up the calculator. I don't need the $$ or want to pay the tax due so right now I'm not going to cash them. I'll see what the rate will be in Nov. I bought some I Bonds while they were still at a good base rate back in April.

Carol

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Author: Crosenfield Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6953 of 19257
Subject: Re: USA EE BONDS Date: 6/23/2001 1:37 PM
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The conversion to HH bonds is done AFTER the bonds reach final
maturity, 2026. THEN you have a year to do it, but your EE bonds
aren't earning interest anymore so you should do it as soon as
they reach that final maturity.
The HH bonds pay interest into your bank account every 6 months,
on the first business day of the month. Therefore, at that point
the interest is taxable. However, you don't pay the accumulated
deferred interest from the 30 years you held the EE bonds until
the HH bonds mature, 40 years from your original purchase.
When you consider the tax deferrment aspect, the HH bonds are
a pretty good deal.
Best wishes, Chris

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Author: ibnana Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6954 of 19257
Subject: Re: USA EE BONDS Date: 6/23/2001 1:57 PM
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a pretty good deal.

Especially if there could be a guarantee I'd live to after 2026! In that year I will be 92 years old and our original poster of this thread would be over 100. ;-)

In my case, half of my EEs came as POD from my mom and I showed the interest to date on her income tax the year she died, 1996. Another plus was that she had no tax liability that year. So if I cash those bonds, I'll only have to pay tax on the interest of the past five years, which was below the original 7 1/2% of the bonds.

Carol


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Author: Crosenfield Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 6955 of 19257
Subject: Re: USA EE BONDS Date: 6/23/2001 3:12 PM
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If the tax isn't deferred, the HH bonds aren't that great a deal.
Currently they pay 4%. However, the ones we have resulted from
EE bonds on which no tax had ever been paid. If it were paid, about
1/3 of the value of the bonds would go to Uncle. So accepting
4% on the full amount is the same amount of interest as getting 6% on
a different investment--in the current rate environment, not that
shabby. But if there weren't tax to pay, you can do better with
corporates or if you are in a higher bracket, munis.
Will we live to see the HH bonds mature? So far, not a big problem.
We can cash them in at any time, of course, forfeiting the interest
since the last pay date.
Best wishes, Chris

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