Submitted By: A.
Answered: October 14, 2016 11:26 am

I have EE bonds that matured. When I cash them in, are they taxable?

Interest on federal savings bonds is taxable; the portion of the redemption representing principal (your initial cost for the bond) is not.

If bonds (Series EE and I) are issued after 1989 and redeemed to pay qualified higher education costs for a taxpayer, spouse, or dependent (and some other conditions are met), some or all of the interest may be tax free, depending on the taxpayer’s overall income. Form 8815 has the details.

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Tax Glossary

Tax attributes

When debts are cancelled in bankruptcy cases, the cancelled amount is excluded from gross income. Tax attributes are certain losses, credits, and property basis that must be reduced to the extent of the exclusion.

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