Jump to content
ATX Community

EE Savings Bonds interest from closed years?


ICOUNT

Recommended Posts

On Series EE bonds you report the interest in the earliest in the  year when the bonds mature or the year they are cashed in. So the bonds matured  years ago that are now closed years. The bonds are now cashed ----Is this interest non taxable because it relates to a closed year?

Link to comment
Share on other sites

If the bonds final maturity date is in a closed year, based on the three year statute, the interest in effect becomes non-taxed.  As in any other inadvertent omission of income or error, the IRS has three years (generally) to audit the return.  The financial institution will issue Form 1099INT for the year the bonds are redeemed.  The reporting for the tax return will report the bond interest and also record an offset amount of interest equal to the interest amount for the prior year(s).

The reporting of prior year bond interest is not to report it on the current year tax return.  The publications refer to filing an amended tax return for the year(s) in question.   If the year(s) is/are closed, the IRS is barred from adjusting the closed year.

If the interest in question represents a 25% understatement of income then the statute is 6 years.  Depending on the circumstances it may be possible to exceed an understatement of 25% for the year(s) in question.

  • Like 1
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Restore formatting

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...