Inherited ee bonds and cd's

[CRAIG BARCH]

My client inherited ee bonds and cd's in december 2013. He then cashed them in february 2014. I believe the bonds and cd's were fully matured when he inherited them.
My questions are; if these bonds & cd's were put on the estate tax return does my client have to pay tax on them also. If they are not included in the estate tax
return does that make them taxable to my client. Does my client have to pay anything on this inherited property? Does he have to pay the difference between what
was put on the estate tax return and when he cashed them in. I appreciate any help i can get in this matter!! Thanks!!





Concerned tax preparer,


craig

[TomJ]

[Retracted. I fold after the raise by Mr. Slugg below]

[Roland Slugg]

The above reply is completely incorrect.

All the interest he receives upon redemption of the bonds is taxable on his tax return. The same is true for interest on the CDs. In the latter case, however, there may have been interest paid to or credited to the decedent prior to his death. That interest is not taxable to the beneficiary ... only newly paid or credited interest is taxable to him.

If the decedent left a taxable estate, the bene can taken an IRD deduction for a pro-rata portion of the estate tax. In most cases that deduction is a very small amount, and if there was no estate tax liability, there can be no IRD deduction.