After my father passed away 22 yrs ago, we converted his E bonds into H bonds for our Mother so she had some income from them. She receives a 1099 from the Treasury that shows her annual interest paid and also her accrued interest paid, which is totaled and claimed. If she cashes a bond, she receives another 1099 from her bank with interest from the cashed bond that also needs to be claimed. I get that we differed the interest from the E bonds when we converted them over, but since we have been paying the accrued interest for a while now, at what point is this money being taxed twice? What am I missing? I just want to make sure I am not missing something that is hurting my mothers return. Any help is appreciated...
