Cashing in Savings bonds?
by admin ~ October 11th, 2009 . Filed under: United States .
ddrmiam asked:
I would like to cash in some saving bonds to purchase a laptop computer for school. Are there tax benefits available to me for doing so.
Melvin Nicoletti
I would like to cash in some saving bonds to purchase a laptop computer for school. Are there tax benefits available to me for doing so.
Melvin Nicoletti
October 13th, 2009 at 5:58 am
No. The only real benefits are from buying municipal bonds, which grow tax free.
When you cash in a bond, you have two cash flows to worry about. One is from the capital gain, the other from interest.
You will likely only get a capital gain if you sell the bond on the secondary bond market and someone is willing to pay you more than it’s worth. If you just go to a bank and cash it in, the only thing you have to report is the interest, and they’ll give you a statement.