I have a client whose uncle bought EE bonds for my client's son in 1999. The bonds were issued in the uncle's name with a POD to the client's son's name. The uncle passed away about 5 years ago. The son, who is 18 years old, is now starting college and they want to cash in the bonds but the answer to this question will dictate how much they will cash in.
After reading Pub 970 and the instructions for Form 8815, it appears that the interest from the EE savings bonds will be fully taxable. Does anyone know of any exception or reason why I am wrong?
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James Kalaitzis
JAMES KALAITZIS, CPA, PC
Commack NY
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