Personal Finance (Not Investing) • Re: Tax on inherited I-bonds

U.S. savings bond interest previously reported.

If you
received a Form 1099-INT for U.S. savings bond interest,
the form may show interest you do not have to report. See
Form 1099-INT for U.S. savings bond interest, earlier.

On Schedule B (Form 1040), Part I, line 1, report all the
interest shown on your Form 1099-INT. Then follow these
steps.
1. Several rows above line 2, enter a subtotal of all inter-
est listed on line 1.
2. Below the subtotal, enter “U.S. Savings Bond Interest
Previously Reported” and enter amounts previously
reported or interest accrued before you received the
bond.
3. Subtract these amounts from the subtotal and enter
the result on line 2.

[. . .]

Example 2. Your uncle died and left you a $1,000 Ser-
ies EE bond. You redeem the bond for $1,000.
Your uncle paid $500 for the bond, so $500 of the
amount you receive upon redemption is interest income.
Your uncle's executor included in your uncle's final return
$200 of the interest that had accrued at the time of your
uncle's death. You have to include only $300 in your in-
come.

The bank where you redeem the bond gives you a
Form 1099-INT showing interest income of $500. You also
receive a Form 1099-INT showing taxable interest income
of $300 from your savings account.

You file Form 1040 or 1040-SR and complete Sched-
ule B (Form 1040). On line 1 of Schedule B (Form 1040),
you list the $500 and $300 interest amounts shown on
your Forms 1099. Several rows above line 2, you put a
subtotal of $800. Below this subtotal, enter “U.S. Savings
Bond Interest Previously Reported” and enter the $200 in-
terest included in your uncle's final return. Subtract the
$200 from the subtotal and enter $600 on line 2. You then
complete the rest of the form.

Statistics: Posted by cas — Sat Jan 25, 2025 4:26 pm