Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 11

A taxpayer who purchases a Series EE U.S. Savings Bond must report the interest income (i.e., increase in value) on the bond on the date the bond is redeemed, or the taxpayer can elect to report the interest currently in income. Under what circumstances should a taxpayer report income at maturity? Under what circumstances is it more advantageous to report income currently?