Bonds Givted

[mightmen16]

Client had some bonds giving to her by a good friend who died. She did not say, but I think the bonds were inherited. What would be the basis in those bonds? Value when she received them or his cost or 0?

[Lion]

If a gift, giver's cost. If inherited, DOD value.

[Burke]

You need to determine when they were given, if they actually were. The owner's name should have been changed at that time. If they were inherited, they get a stepped-up basis to FMV at the date of death, and if sold or redeemed, they are treated as long-term capital gain.

[origun]

Could they be govt. savings bonds, not corporate bonds? If so, you have taxable interest. I inherited EE bonds from my mother and I cashed in at bank and received a 1099-INT for interest earned from date of purchase....and I see this interest fairly often from clients.

[TAX4US]

What happens if these savings bonds were 10 years past their mature date? the estate cashed these in as both parties on the bonds are deceased.

[Burke]

What happens if these savings bonds were 10 years past their mature date? the estate cashed these in as both parties on the bonds are deceased.

Whatever the interest was is income to the estate. The bank should have furnished this figure at redemption, and the estate will get a 1099INT.