My wife cashed in her Canadian Savings Bonds last year (given to her as a child). What kind of income should they be reported as?
From what you have described, those bonds were held as compound interest, i.e. accumulated interested and paid out when the bond was cashed/matured. This is pretty much the same as US EE bonds except you get a Canadian T5 slip instead of a 1099-INT form. You would convert the T5 interest to US dollars using an exchange rate for the day the bonds were cashed and report it on your US income tax as regular Schedule B interest. If the Canadian government withheld Canadian taxes, then you would want to claim a credit for the foreign tax on Form 1116. Instructions for TurboTax may be found at: