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.

Tax Glossary

Adjusted basis

A statutory term describing the cost used to determine your profit or loss from a sale or exchange of property. It is generally your original cost, increased by capital improvements, and decreased by depreciation, depletion, and other capital write-offs.

More terms