[Anonymous]

The Wiley book says interest income includes interest on US government bonds. Page 21 of the NINJA notes has US EE Savings Bonds under the Tax-Free Interest Income heading.

Personally, I thought the interest on EE bonds was taxable. My husband’s parents got him a ton of these as a kid, and when we cashed some in a few years ago we had to claim them on our taxes.

Please help! Thanks!!

[sarah210]

I may be making this up, but I thought that EE bond interest was tax free if used to pay educational expenses. So maybe if you don't use it for that, you are taxed on it?

REG- 53, 91
BEC- 88
FAR- 62, 85
AUD- 85

Ethics- 93

[jeff]

Double check the Wiley book to be sure it says that.

This is from the IRS:

“Education Savings Bond Program

You may be able to exclude from income all or part of the interest you receive on the redemption of qualified U.S. savings bonds during the year if you pay qualified higher educational expenses during the same year. This exclusion is known as the Education Savings Bond Program.

You do not qualify for this exclusion if your filing status is married filing separately.

Form 8815. Use Form 8815 to figure your exclusion. Attach the form to your Form 1040 or Form 1040A.

Qualified U.S. savings bonds. A qualified U.S. savings bond is a series EE bond issued after 1989 or a series I bond. The bond must be issued either in your name (sole owner) or in your and your spouse's names (co-owners). You must be at least 24 years old before the bond's issue date. For example, a bond bought by a parent and issued in the name of his or her child under age 24 does not qualify for the exclusion by the parent or child. “

https://www.irs.gov/publications/p17/ch07.html#en_US_2011_publink1000171497

[Anonymous]

Yes, the Wiley book does say that if an EE bond is used for education then the interest is tax-exempt. However, I read the NINJA notes to say that all interest on EE bonds is exempt. Page 21 of the notes say…

Tax-Free Interest Income

– State and Municipal Bonds

– US EE Savings Bonds

– US HH Bonds are Taxable

-Remember: US Treasuries are Taxable!!!

Luckily this never appeared on my exam yesterday so it wasn't a big deal. But you may want to add “if used for education” so there's no confusion. Thanks!!

[Anonymous]

I also found this to be true within Becker. The book says Series EE (U.S Savings bonds is tax exempt), but the Becker simulation lists is as an item included in taxable income. Please help.

[TheBsEr]

The IRS quote from Jeff is correct. I used Becker to prepare and I remember that for the Series EE bond, it needs to be used for qualifying education expenses.

AUD - 91
FAR - 90
REG - 87
BEC - 91
Ethics - 98

[Anonymous]

So include it if they do not give any other information saying what it was used for? Do you have any other helpful advice BsEr for REG? I take my test Nov. 10th.

[momto5]

Yes, Becker spells that out on page R1-22 of the 2012 edition. Series EE Savings Bonds tax exempt when used to pay for higher education. General rule is “All interest is taxable unless specifically excluded”. I agree – Ninja Notes need a modification here.

FAR - 92 (4/27/12)
AUD - 96 (7/17/12)
BEC - 92 (8/30/12)
REG - 91 (11/12/12)

[Author]

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