dmertz
Level 15

Retirement tax questions

See IRS Pub 550 regarding this situation (the result of which is that there is no step-up in basis on savings bonds):  https://www.irs.gov/publications/p550#en_US_2024_publink10009922

 

Essentially, the basis is the original purchase price plus the amount of interest on which taxes have already been paid.  Any amount beyond that is deferred income which will eventually be taxable income.