Note that it is not just the amount of interest on the savings bonds that counts, but the total amount of bond(s) redeemed.
You may split the educational expenses any way your want. Using an example: you have $10,000 of tuition and redeemed a $10,000 bond that includes $3000 interest. You may count $4000 of the education expenses to claim the American Opportunity Credit. That leaves $6000 to use for the savings bond. 6000 divided by 10,000 (the bond redemption amount) = 60%. 60% of the $3000 interest will be excluded (not taxed). 40% of the interest (0.40 x 3000 = $1200) will be taxed. TurboTax will prepare form 8815 to show this calculation.
