Message Font: Serif | Sans-Serif
No. of Recommendations: 1
I have a small collection of EE/I bonds. They are all well over 5 years at this point. The vast majority of the value is in the I bonds which are 2001 vintage (i.e. a pretty good rate). The EE bonds are all maturing in 2013-2014.

Is the interest federally taxable as income (25% for me) or long term capital gains (15%)?

It's ordinary income interest, not a cap gain.

Before spending too much time on the calculation intricacies, make sure that the bonds qualify. From Pub 970:

A qualified U.S. savings bond is a series EE bond issued after 1989 or a series I bond. The bond must be issued either in your name (as the
sole owner) or in the name of both you and your spouse co-owners).

The owner must be at least 24 years old before the bond’s
issue date. The issue date is printed on the front of
the savings bond.

If the bonds are qualified you start with your qualified expenses and reduce them by the amount you take as a tuition deduction. The balance is available for exclusion of savings bond interest.

All the details are in Pub 970.

Rule Your Retirement Home Fool
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Live Video Event Monday!
The GP team is hosting a live video event on Monday at 4 p.m. ET. Don't worry if you can't make it — we'll have a replay and a transcript. Click for more!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.