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mkricheff
New Member

I recently received some EE bonds my late uncle took out in my name. Do I need to report anything on my taxes this year?

My uncle recently passed away, and I received 28 EE savings bonds taken out in both of our names. The current total value is around $3,700, and the oldest bond doesn't mature until 2020. What, if anything, do I need to report on my taxes this year? If I need to report something, how would I go about doing that?

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Accepted Solutions
TaxGuyBill
Level 9

I recently received some EE bonds my late uncle took out in my name. Do I need to report anything on my taxes this year?

Step #1:  Find out if your uncle has been reporting the accrued interest each year.  That is not common, but it is an option that your uncle had.  If he DID, then when you turn in the bonds you will only pay interest on what was earned after he died.

Step #2:  Find out if the the cumulative interest was reported on your uncle's final tax return.  If it was, then when you turn in the bonds you will only pay interest on what was earned after he died.

Step #3:  If neither of those two apply, you will owe Federal Income Tax on all of the interest that the bonds earned.  It will not be subject to State income tax. 

(a) You have the option to report the accrued interest every year on your tax return.  This is not common, but it is an option.  Even if #1 or #2 do apply, you have the option to do this on your portion of the interest.  If you do not choose this option, there is nothing to report on your current year tax return, it is only reported when you trade in the bonds.

(b) If you do not report the interest each year, you will pay Federal income tax all of the interest when you turn in your bonds.  This is the most common scenario.


https://www.irs.gov/publications/p550#en_US_2017_publink10009922

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3 Replies
TaxGuyBill
Level 9

I recently received some EE bonds my late uncle took out in my name. Do I need to report anything on my taxes this year?

Step #1:  Find out if your uncle has been reporting the accrued interest each year.  That is not common, but it is an option that your uncle had.  If he DID, then when you turn in the bonds you will only pay interest on what was earned after he died.

Step #2:  Find out if the the cumulative interest was reported on your uncle's final tax return.  If it was, then when you turn in the bonds you will only pay interest on what was earned after he died.

Step #3:  If neither of those two apply, you will owe Federal Income Tax on all of the interest that the bonds earned.  It will not be subject to State income tax. 

(a) You have the option to report the accrued interest every year on your tax return.  This is not common, but it is an option.  Even if #1 or #2 do apply, you have the option to do this on your portion of the interest.  If you do not choose this option, there is nothing to report on your current year tax return, it is only reported when you trade in the bonds.

(b) If you do not report the interest each year, you will pay Federal income tax all of the interest when you turn in your bonds.  This is the most common scenario.


https://www.irs.gov/publications/p550#en_US_2017_publink10009922

Critter
Level 15

I recently received some EE bonds my late uncle took out in my name. Do I need to report anything on my taxes this year?

Nothing to report until you cash them in ... then you will pay the taxes on the interest the bonds earned over the years. 

Anonymous
Not applicable

I recently received some EE bonds my late uncle took out in my name. Do I need to report anything on my taxes this year?

when you cash the bonds in you will be taxed on all their earnings.   Even those earned when your uncle was alive.  these earnings are referred to as income in respect of a decedent.  Income in Respect of a Decedent (IRD) refers to untaxed income which a decedent had earned or had a right to receive during his or her lifetime. IRD is taxed to the individual beneficiary or entity that inherits this income.

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