Jerry purchased a U.S. Series EE savings bond for $744. The bond has a maturity value in 10 years of $1,000 and yields 3% interest. This is the first Series EE bond that Jerry has ever owned.
A) Jerry can defer the interest income until the bond matures in 10 years.
B) Jerry must report ($1,000 - $744)/10 = $25.60 interest income each year he owns the bond.
C) The interest on the bonds is exempt from Federal income tax.
D) Jerry can report all of the $256 as a capital gain in the year it matures.
E) None of these.

Question

Quizplus · Accepted Answer

Jerry can defer the interest income until the bond matures in 10 years, as Series EE bonds allow for tax deferral on interest until redemption or maturity.

Jerry Purchased a U