The amount of interest income a taxpayer recognizes when he redeems a U.S. savings bond is:

Question

Quizplus · Accepted Answer

The amount of interest income a taxpayer recognizes when he redeems a U.S. savings bond is the excess of the bond proceeds over the taxpayer's basis in the bonds. This is because the interest income has already been accruing and accumulating over the life of the bond, and is included in the bond proceeds. Therefore, only the amount over the original investment (basis) is considered taxable interest income.

The Amount of Interest Income a Taxpayer Recognizes When He