United States savings bonds.
United States savings bonds (Series E before 1980 and Series EE after), including Patriot Bonds (see below) are issued on a noninterest bearing discount basis. Interest accrues at stated intervals and becomes part of the redemption value paid when the bond is cashed or finally matures. The difference between the price paid and the larger redemption value is interest. Savings bonds continue to accrue interest after the stated maturity until the Treasury announces discontinuance of payments, generally after 30 years. For the new method of calculating interest, see "New fixed interest rates," below. This interest is subject to all federal taxes (unless it qualifies for the exclusion described in Q 1141), and the bonds are subject to federal and state estate, inheritance, gift or other excise taxes, but not state or local taxes on principal or interest. (3) Bonds held less than five years from issue date are subject to a 3-month interest penalty.
Minimum holding period. In 2003, the Treasury Department extended the minimum holding period applicable to United States savings bonds from 6 to 12 months, effective with issues dated on and after February 1, 2003. The minimum holding period is the length of time from issue date that a bond must be held before it is eligible for redemption. Both Series EE and Series I savings bonds are affected. Series EE and Series I savings bonds bearing issue dates prior to February 1, 2003 retain the 6-month holding period in effect when they were issued. (4)
Fixed interest rates. The Treasury Department has announced that Series EE savings bonds issued on and after May 1, 2005, will earn fixed, instead of variable, rates of interest. (5) Previously, a new variable rate was announced each May 1 and November 1, and applied to bonds during the first semiannual rate period beginning on or after the effective date of the rate. Consequently, a Series EE bond purchased prior to May 1, 2005, earned a new rate of interest every six months. However, a Series EE bond purchased on or after May 1, 2005, will have one rate of interest that will continue for the life of the bond (although a different rate or method of determining the rate may be used for any extended maturity period).
The interest rate for a Series EE bond issued on or after May 1, 2005, will be a fixed rate of interest as determined by the Secretary of the Treasury and announced each May 1 and November 1. The most recently announced fixed rate will apply to Series EE bonds purchased during the six months following the announcement (or for any other period of time announced by the Secretary). The fixed rate will be established for the life of the bond, including the extended maturity period, unless the Secretary announces a different fixed rate or amends the terms and conditions prior to the beginning of the extended maturity period. All other Series EE terms and conditions remain unchanged. These changes do not affect bonds that were purchased before May 1, 2005. (1)
Deferred reporting of interest. An owner of E, EE or Series I savings bonds (see Q 1144) who reports on a cash basis may treat the increase in redemption value, for federal income tax purposes, either of two ways:
(1) he may defer reporting the increase to the year of maturity, redemption, or other disposition, whichever is earlier; or
(2) he may elect to treat the increase as income each year as it accrues. (2)
Ordinarily, an election made by the owner of an E, EE or I bond to report interest annually applies to all E, EE and I bonds he then owns or subsequently acquires. (3) However, a taxpayer who reports interest annually may elect to change to deferred reporting with automatic consent of the IRS, provided certain requirements are met. To obtain automatic consent for the taxable year for which the change is requested, the taxpayer may file a statement in lieu of Form 3115.4 The statement must be identified at the top as follows: "CHANGE IN METHOD OF ACCOUNTING UNDER SECTION 6.01 OF THE APPENDIX OF REV. PROC. 2002-9." The statement must set forth:
(i) the Series E, EE, or I savings bonds for which the change in accounting method is requested;
(ii) an agreement to report all interest on any bonds acquired during or after the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest; and
(iii) an agreement to report all interest on the bonds acquired before the year of change when the interest is realized upon disposition, redemption, or final maturity, whichever is earliest, with the exception of any interest income previously reported in prior taxable years.
The statement must include the name and Social Security number of the taxpayer underneath the heading. (5) The change is effective for any increase in redemption price occurring after the beginning of the year of change for all Series E, EE, and I savings bonds held by the taxpayer on or after the beginning of the year of change. (6) The taxpayer must attach the signed statement to his tax return for the year of the change, which must be filed by the due date (including extensions). (7) (Alternatively, instead of filing the statement, the taxpayer can request permission to change from deferred reporting to annual reporting by filing Form 3115 and following the form instructions for an automatic change.) If the taxpayer is precluded from using the automatic consent procedure under Rev. Proc. 2002-9, above, the taxpayer must file Form 3115 in accordance with the regulations. (8)
Taxpayers may switch from deferred reporting to annual reporting in any year without permission; however, an election under Revenue Procedure 2002-9 may not be made more than once in any 5-year period. (9) The year of change is included within the 5-year prohibition regarding prior changes. (10)
The election to treat accruing interest as income annually is made by including the interest in gross income on the owner's tax return for the year he makes the election. (1) It may not be made by amended return. (2) He must include (in the year he elects to report interest annually) the increase in the redemption price of all his E, EE, and I bonds that has occurred since the date of acquisition. If he owns any bond (such as H or HH) that retains interest deferred on an E or EE bond, that interest must also be reported. (3) After making the election, he must include the actual increase in redemption value that occurs on the stated intervals in each year. (This is not necessarily the amount that would accrue ratably.) (4)
A bond owner whose income is not sufficient to require filing a return is not deemed to have automatically elected to treat accruing interest as income; however, the election may be made by filing a return reporting the interest, even though no return is otherwise required. (5)
A previous election to report annual increases in redemption value does not bind anyone to whom the bond is transferred. (6) For example, an executor who elects to include deferred interest in an estate's income is not bound by the election to report annually when the bond is transferred to him in his capacity as trustee of a trust created under a will. (7)
To the extent the increase in redemption value (interest) has not been includable in gross income previously by the taxpayer or any other taxpayer, it is included by a cash basis taxpayer for the tax year in which the obligation is redeemed or disposed of. (8) (For an explanation of the exclusion for interest on certain Series EE and Series I bonds used for educational expenses, see Q 1141.) If the obligation is partially redeemed or partially disposed of by being partially reissued to another person, the increase is included in income by the taxpayer in proportion to the total denominations redeemed or disposed of. (9)
Similarly, where Series E and EE bonds were transferred incident to a divorce, the transferor was required to include unrecognized interest as income in the year of transfer. The transferee's basis in such bonds was adjusted by adding the amount of interest includable by the transferor. (10)
Previously, an individual could, at maturity or before, exchange a Series E or EE bond for a Series HH bond (or Series H bond before 1980--but see Editor's Note, Q 1143) without recognizing the unreported interest, except that he must report the interest to the extent he receives cash in the exchange. (11)
Transfer of an E/EE bond to a revocable personal trust does not require inclusion of unreported interest in income because the grantor continues to be considered the owner of the bonds. (12) Reissuance of a Series H bond (received in exchange of a Series E bond on which reporting of interest has been deferred) to a trustee of a trust where the trust corpus will revert to the grantor and any previously unreported interest is allocable to corpus, will not result in inclusion of the previously unreported interest in the grantor's income. He will include the interest in his gross income in the year the bond is redeemed, disposed of, or reaches final maturity. (13)
Surrender of an E bond, bought entirely with his own funds, by one co-owner for reissue in the sole name of the other co-owner causes recognition of unreported appreciation to the date of reissue in the purchasing co-owner's name (see also Q 1540 regarding the gift). (1) However, if the bond is reissued in the sole name of the co-owner who originally purchased the bond with his own funds there is no taxable transaction. (2)
Patriot Bonds. Patriot Bonds are regular Series EE Savings Bonds specially inscribed with the legend "Patriot Bond." As with regular Series EE Savings Bonds, Patriot Bonds are sold at one-half of face value ($50, $75, $100, $200, $500, $1,000, $5,000, and $10,000). Patriot Bonds earn 90% of 5-year Treasury security yields. Patriot Bonds increase in value monthly, but interest is compounded semiannually. Interest on Patriot Bonds is exempt from state and local income taxes; federal tax can be deferred until the bond is redeemed or it stops earning interest (in 30 years). Patriot bonds can be redeemed anytime after six months for issue dates of January 2003 and earlier; bonds with issue dates on or after February 1, 2003 can be cashed anytime after 12 months. Depending on interest rates, bonds may actually reach face value anywhere between 12 and 17 years. However, a 3-month interest penalty is applied to bonds redeemed before five years. Patriot Bonds can be purchased in person at banks or credit unions, or on the Internet at: http:www.savingsbonds.gov. (3)
1140. Can a child owning Series E or EE bonds elect to include interest?
According to IRS Publication 550, if a child is the owner of an E, EE, or I bond, the election to report interest annually may be made by the child or by the parent. The choice is made by filing a return showing all the interest earned through the year and stating that the child is electing to report interest each year. The child then does not have to file another return until he or she has enough gross income during a year to require filing.
A child could elect to change from annual to deferred reporting under Revenue Procedure 89-46. This provision is not included in the current revenue procedure governing such elections. (4) However, Publication 550 states that neither the parent nor the child can change the way that interest is reported unless permission from the IRS is requested (in accordance with the procedures outlined in Q 1139). Thus, it appears that a child may make such election. If the election is available, the parent of a child making such an election may sign Form 3115 on behalf of the child. See Q 1411 for an explanation of the taxation and filing requirements of children under age 14.
1141. May the interest on Series EE or Series I bonds used to meet education expenses be excluded from income?
Subject to certain limitations and phaseout rules, interest on qualified United States savings bonds may be excluded from gross income to the extent that the proceeds are used to pay qualified higher education expenses during the taxable year in which the redemption occurs. The exclusion is available only to taxpayers whose modified adjusted gross income falls within certain ranges. (5)
The special tax benefits available for education savings with Series EE bonds also apply to Series I (inflation-indexed) savings bonds, provided the requirements set forth below are satisfied. (6) For the treatment of inflation-indexed savings bonds, see Q 1144.
Qualified United States savings bonds are any United States savings bonds issued (i) after 1989, (ii) to an individual who has attained age 24 before the date of issuance. (1) The "date of issuance" is the first day of the month the bonds are purchased; therefore, a purchaser who has just reached the age of 24 and wishes to take advantage of the exclusion should purchase the bonds in the month following his birthday. (2)
Qualified higher education expenses are tuition and fees required for enrollment or attendance at an eligible educational institution or certain vocational education schools. Qualified higher education expenses do not include amounts by which educational fees are reduced by items such as scholarships, grants, employer provided educational assistance, or other amounts that reduce tuition. The term also does not include expenses with respect to any course or other education involving sports, games, or hobbies other than as part of a degree program. The IRC specifies "tuition and fees required for enrollment or attendance ... at an eligible educational institution"; the term does not include expenses incurred for room and board or travel expenses to and from college. (3)
Qualified higher education expenses include any contribution to a qualified tuition program (formerly known as a qualified state tuition program - see Q 1413) on behalf of a designated beneficiary or to a Coverdell Education Savings Account (formerly known as an Education Individual Retirement Account--see Q 1412) on behalf of an account beneficiary, who is the taxpayer, the taxpayer's spouse, or any dependent with respect to whom the taxpayer is allowed a dependency exemption (see Q 1426).4 For purposes of applying the rules applicable to qualified tuition programs under IRC Section 529, the investment in the contract is not increased because of any portion of the contribution to the program that is not includable in gross income as a qualified higher education expense. (5)
The rules allowing the exclusion of interest on qualified United States savings bonds are coordinated with the Hope and Lifetime Learning Credits (see Q 1438). Generally, the amount of the qualified higher education expenses otherwise taken into account under IRC Section 135(a) with respect to the education of an individual is reduced by the amount of the qualified higher education expenses taken into account in determining the credit allowable to the taxpayer or any other person under the rules for the Hope and Lifetime Learning credits with respect to qualified higher education expenses. Likewise, the rules allowing the exclusion of interest on qualified United States savings bonds are also coordinated with the amounts taken into account in determining the exclusions for qualified tuition programs (see Q 1413) and Coverdell Education Savings Account distributions (see Q 1412). (6) The above amounts are reduced before the application of the interest limitation and phaseout rules (see below).
Modified adjusted gross income refers to adjusted gross income (AGI) determined without regard to this exclusion and without regard to IRC Sections 137 (exclusions for qualified adoption expenses), 221 (deduction for student loan interest), 222 (deduction for higher education expenses, which expires 12-31-2009), 911, 931, or 933, (exclusions of foreign earned income or income earned in certain possessions of the United States) but determined after application of IRC Sections 86, (partial inclusion of Social Security and railroad retirement benefits), 469 (adjustments with respect to limitations of passive activity losses and credits) and 219 (adjustments for contributions to IRAs and SEPs). (7)
Limitations and Phaseout
If the aggregate proceeds of the bond exceed the amount of expenses paid, the amount of the exclusion is limited to an "applicable fraction" of the interest otherwise excludable. Essentially, this calculation simply reduces the amount of excludable interest pro rata, based on the proportion of educational expenses to redemption amounts. The numerator of the "applicable fraction" is the amount of expenses paid; the denominator is the aggregate proceeds redeemed. For example, a taxpayer whose Series EE bonds have reached maturity may exclude the amount of redemption, up to the amount of fees paid; generally, half of any excess bond proceeds will be treated as taxable interest and the other half as a return of principal. If the qualified education expenses equal or exceed the proceeds of the redemption, this limitation does not apply. (1)
An additional limitation is imposed by means of a phase-out rule, designed to confine the tax benefit to lower and middle income taxpayers. The exclusion is phased out beginning at the following levels of modified adjusted gross income in the 2010 tax year; single or head of household--$70,100; married filing jointly--$105,100. The range over which the phaseout occurs is $15,000 (single) or $30,000 (joint return); thus the exclusion is fully phased out at $85,100 for single filers, or $135,100 for married individuals filing jointly. (2) (The exclusion is not available to married taxpayers filing separately.) The income levels at which the phase-out begins are indexed for inflation and rounded to the nearest $50. (3)
The phaseout amount for tax years beginning in 2010 is calculated as follows:
1. A fraction is determined as follows: (a) the numerator is the excess of the taxpayer's modified adjusted gross income for 2010 over $70,100 (single or head of household) or $105,100 (married filing jointly; (b) the denominator is $15,000 (single or head of household), or $30,000 (joint return). For example, for a single or head of household taxpayer with modified adjusted gross income of $75,100 the ratio would be $5,000 to $15,000, or one-third.
2. The amount otherwise excludable is reduced by that proportion. In the example above, an otherwise permitted exclusion of $12,000 would be reduced by one-third, to $8,000.
The operation of both limitations may be seen in the following example:
Example: Mr. and Mrs. Mabry pay $18,000 in tuition expenses and redeem savings bonds of $20,000 in 2010. They file jointly and their modified adjusted gross income is $115,100.
Exclusion limitation: Of the $20,000 redemption amount, assume that $10,000 is return of principal and $10,000 is interest. Since less than $20,000 was spent on tuition, the exclusion is limited to the amount that represents the proportion of tuition payments to redemption proceeds. The applicable fraction is $18,000/$20,000. Thus, $9,000 of the $10,000 interest is potentially excludable and $1,000 would be taxed as ordinary income.
Phaseout amount: The threshold amount in 2010 for the phase-out of the exclusion is $105,100 (joint return), and their $115,100 modified adjusted gross income is $10,000 over that amount. The ratio of $10,000 to $30,000 is one-third, therefore their otherwise excludable interest ($9,000) is reduced by one-third, leaving $6,000 that may be excluded from income.
There are several additional rules governing the savings bond exclusion and limiting the potential for abuse of it. The taxpayer must be the original and sole owner of the bond (or own it jointly with his spouse). (4) A bond purchased from another individual will not qualify for the exclusion. The taxpayer purchasing the bond must have attained the age of 24 by the date of issuance. (This rule prevents savings bonds that are purchased in a child's name to avoid the "kiddie tax" from obtaining preferred treatment when redeemed.) The tuition expenses must be for the taxpayer, the taxpayer's spouse, or a dependent of the taxpayer (with respect to whom he can claim a dependency exemption). The exclusion is not available for bonds obtained as part of a tax-free rollover of Series E savings bonds into Series EE bonds. (1)
1142. How is interest on a Series E or EE bond taxed after the death of the owner?
An executor or administrator may make an election on behalf of a decedent (who has not previously elected) to include all interest in the decedent's final income tax return. (2) If the decedent or his representative had not elected to include interest in the decedent's gross income annually, all interest earned before and after death is income to the estate or other beneficiary receiving the bond, either on his election to include interest annually or on redemption, final maturity or disposal of the bond. Either may defer reporting or elect to report just as any owner (see Q 1139).
Unreported interest earned on E and EE bonds up to the date of death and unreported interest that was part of the consideration for H and HH bonds held at death, are income in respect of a decedent. (3) The person who eventually includes the deferred interest in income may take a deduction in the year he reports the interest for any estate tax attributable to the income in respect of a decedent (see Q 1430). (4) The Service has ruled that in determining the fair market value of Series E savings bonds for estate tax purposes, the estate should not calculate a discount for lack of marketability for the income taxes due on the interest that accrued on the bonds from the date of purchase to the date of maturity. (5)
Like the owner of any other E or EE bond, the owner of E and EE bonds acquired from a decedent could exchange them for Series HH bonds (or H bonds before 1980--but see Editor's Note, below) without recognition of unreported interest. (6) However, the interest must be included in income on disposal, redemption or final maturity of the H or HH bonds received in the exchange, or on the election of the owner to report annually interest on E and EE bonds. (Editor's Note: The Bureau of the Public Debt stopped offering Series HH Savings Bonds to the public after August 31, 2004. HH bonds issued through August 2004 will continue to earn interest until they reach final maturity 20 years after issue. HH bonds, issued since 1980, are available in exchange for Series E or EE bonds. (7))
The Service privately ruled that: (1) the distribution of Series E and Series HH savings bonds from a decedent's estate to several tax-exempt organizations did not result in the recognition of income by the estate; (2) the accrued interest attributable to the bonds would be includable in the gross income of the exempt organizations in the year in which the bonds were disposed of, redeemed, or reached maturity; and (3) assuming that the organizations continued their exempt status, the accrued interest would be exempt when recognized by the organizations. (8)
1143. How is the owner of Series H or HH bonds taxed?
Editor's Note: The Bureau of the Public Debt stopped offering Series HH Savings Bonds to the public after August 31, 2004. HH bonds issued through August 2004 will continue to earn interest until they reach final maturity 20 years after issue. HH bonds, issued since 1980, are available in exchange for Series E or EE bonds. (1)
Series H and HH bonds are interest-paying United States savings bonds. Interest is paid by check semiannually, and the amounts paid in a year are included in gross income. (2) The bonds are nontransferable. Interest received on H/HH bonds is subject to all federal taxes, and the bonds are subject to federal and state estate, gift, inheritance, or other excise taxes but not to state or local taxes on principal or interest. (3)
If H or HH bonds were received in exchange for E or EE bonds on which reporting of interest was deferred, the owner may continue to defer reporting the interest accrued on the E or EE bonds exchanged until the year in which the H or HH bonds received in the exchange reach final maturity, are redeemed, or are otherwise disposed of. At that time, the amount of unreported interest on the E or EE bonds that was not recognized at the time of the exchange must be reported as interest. (4) HH bonds bear a legend showing how much of the issue price represents interest on the securities exchanged. The owner of Series H or HH bonds received in exchange for E or EE bonds on which reporting was deferred, may elect to report the past increases in redemption value of the E or EE bonds. The election would also apply to any other E or EE bonds or H or HH bonds he owns or thereafter acquires in any subsequent years, unless the Service permits him to change his method of reporting. (5)
The Service privately ruled that: (1) the distribution of Series E and Series HH savings bonds from a decedent's estate to several tax-exempt organizations did not result in the recognition of income by the estate; (2) the accrued interest attributable to the bonds would be includable in the gross income of the exempt organizations in the year in which the bonds were disposed of, redeemed, or reached maturity; and (3) assuming that the organizations continued their exempt status, the accrued interest would be exempt when recognized by the organizations. (6)
1144. How is the owner of Series I bonds taxed?
In 1998, the Treasury Department began offering a type of savings bonds whose rates are adjusted for inflation. Series I (inflation-indexed) savings bonds are sold at par value (face amount) in denominations ranging from $50 to $5,000. (7) An individual can purchase no more than $5,000 in Series I bonds during any calendar year. (8) The difference between the purchase price and the redemption value is taxable interest, which is payable when the bond is redeemed or finally matures. (9) Series I savings bonds mature in 30 years. (10)
Series I savings bonds accrue earnings based on both a fixed rate of return and the semiannual inflation rate. (11) A single rate is constructed to reflect the combined effects of the two rates. (12) The following example demonstrates how the composite earnings rate is determined:
Example: The 3.36% composite earnings rate for Series I savings bonds bought from November 2009 through April 2010, applies for the first six months after their issue. The earnings rate combines the .30% fixed rate with the 1.53% semiannual inflation rate (as measured by the Consumer Price Index for all Urban Consumers (CPI-CU)). (1)
The formula for computing the composite rate is:
Composite rate = [Fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation rate)]
For 2010, the composite rate is calculated as follows:
Composite rate = [0.0030 + (2 x 0.015 3) + (0.0030 x 0.0153)]
Composite rate = [0.0030 + 0.0306 + 0.0000459]
Composite rate = [0.0336459]
Composite rate = 0.0336
Composite rate = 3.36%
The fixed rate of return, applicable at the time a Series I savings bond is issued, will apply to the bond throughout its 30-year life. (2) The semiannual inflation rate, announced each May and November, will be reflected in a Series I savings bond's value beginning on that bond's next semiannual interest period following the announcement. (3) In general, a bond's composite rate will be higher than its fixed rate if the semiannual inflation rate reflects any inflation. In other words, inflation will cause a bond to earn additional interest. Likewise, a bond's composite rate will be lower than its fixed rate if the semiannual inflation rate reflects any deflation. Deflation will cause a bond to increase in value slowly, or not increase in value at all. However, even if deflation becomes so great that it would reduce the composite rate to below zero, the Treasury will not allow the value of a bond to decrease from its most recent redemption value. (4)
A Series I savings bond may be redeemed anytime after six months for issue dates of January 2003 and earlier. Bonds with issue dates on or after February 1, 2003 can be cashed anytime after 12 months. A bond redeemed less than five years from the date of issue will be subject to a 3-month interest penalty. (5) Tables of redemption values are made available in various formats and media, including the Internet (www.savingsbonds.govj. (6) The bonds have an interest paying life of 30 years after the date of issue, and cease to increase in value as of that date. (7)
Interest earned on Series I savings bonds is subject to all federal taxes (unless it qualifies for the exclusion described in Q 1141), and the bonds are subject to federal and state estate, inheritance, gift or other excise taxes, but not state or local taxes on principal or interest. (8)
Interest earned on Series I savings bonds is includable on federal income tax returns in the same way as Series EE bonds (see Q 1139).9 In general, owners may defer reporting the increment for federal income tax purposes until: (i) they redeem the bonds, (ii) the bonds cease earning interest after 30 years, or (iii) the bonds are otherwise disposed of, whichever is earlier. (1) However, an owner may elect to accrue the increment each year it is earned. (2) If an investor takes no action, the gain is deferred until the first of the three events described above occurs. (3) The increase in value will be includable in income annually only if an investor affirmatively acts by making such an election. (4)
The special tax benefits available for education savings with Series EE bonds also apply to Series I savings bonds. (5) (See Q 1141.) Essentially, a taxpayer who otherwise satisfies the requirements set forth in IRC Section 135 (see Q 1141) may be able to exclude all or part of the interest earned on Series I savings bonds from income for that tax year. (6)
Series I savings bonds are nontransferable. (7) Although these bonds can be exchanged for Series EE savings bond, they can no longer be exchanged for Series HH savings bonds because the Bureau of Public Debt stopped offering Series HH bonds to the public effective August 31, 2004.
(3.) 31 CFR [section] 351.8(a).
(4.) See News Release (1-15-2003) at: http://publicdebt.treas.gov/.
(5.) See News Release (4-4-2005), at: http://www.publicdebt.treas.gov/com/comeefixedrate.htm.
(1.) See Final Rule, Offering of United States Savings Bonds, Series EE, 31 CFR Part 351, 70 Fed. Reg. 17288 (4-52005).
(2.) IRC Sec. 454(a).
(3.) See IRS Pub. 550.
(4.) Rev. Proc. 2002-9, 2002-1 CB 327, Appendix 6.01.
(5.) See IRS Pub. 550.
(6.) Rev. Proc. 2002-9, above, Appendix Sec. 6.01.
(7.) IRS Pub. 550.
(8.) Rev. Proc. 2002-9, above, Sec. 4.03.
(9.) See Rev. Proc. 2002-9, above, Sec. 4.02(6); IRC Sec. 454; 31 CFR [section] 351.8(b).
(10.) Rev. Proc. 2002-9, above, Sec. 4.02(6).
(1.) IRC Sec. 454(a).
(2.) Rev. Rul. 55-655, 1955-2 CB 253.
(3.) IRC Sec. 454(a).
(4.) Treas. Reg. [section] 1.454-1(a)(2).
(5.) Apkin v. Comm., 86 TC 692 (1986).
(6.) Treas. Reg. [section] 1.454-1(a).
(7.) Rev. Rul. 58-435, 1958-2 CB 370.
(8.) See, e.g., Landers v. Comm., TC Memo 2003.
(9.) Treas. Reg. [section] 1.454-1(c).
(10.) Rev. Rul. 87-112, 1987-2 CB 207.
(11.) IRC Sec. 1037(a); TD Circular, Pub. Debt Series No. 1-80, 1980-1 CB 715; 31 CFR [section] 352.7(g)(3).
(12.) Rev. Rul. 58-2, 1958-1 CB 236; Let. Rul. 9009053.
(13.) Rev. Rul. 64-302, 1964-2 CB 170.
(1.) Rev. Rul. 55-278, 1955-1 CB 471.
(2.) Rev. Rul. 68-61, 1968-1 CB 346.
(3.) See Treasury Press Release, Treasury Department Unveils Patriot Bond oon 3-Month Anniversary oof September 11 Attacks (December 22, 2001).
(4.) See Rev. Proc. 2002-9, 2002-1 CB 327.
(5.) IRC Sec. 135.
(6.) See 31 CFR [section] 359.66.
(1.) IRC Sec. 135(c)(1).
(2.) Notice 90-7, 1990-1 CB 304.
(3.) IRC Secs. 135(c), 135(d); See Instructions to Form 8815.
(4.) IRC Sec. 135(c)(2)(C).
(5.) IRC Sec. 135(c)(2)(C).
(6.) IRC Sec. 135(d)(2).
(7.) IRC Sec. 135(c)(4).
(1.) IRC Sec. 135(b)(1).
(2.) Rev. Proc. 2009-50, 2009-45 IRB 617.
(3.) IRC Sec. 135 (b)(2)(B).
(4.) Conference Committee Report, TAMRA '88.
(1.) Conference Committee Report, TAMRA '88.
(2.) Rev. Rul. 68-145, 1968-1 CB 203; Rev. Rul. 79-409, 1979-2 CB 208.
(3.) See Let. Rul. 9024016.
(4.) See Treas. Regs. [section] [section] 1.691(a)-2(b) Ex. 3, 1.691(b)-1(a); Rev. Rul. 64-104, 1964-1 CB 223.
(5.) See TAM 200303010.
(6.) Rev. Rul. 64-104, above.
(7.) See Press Release (2-18-2004), at: www.publicdebt.treas.gov/com/comtdhhw.htm.
(8.) Let. Rul 9845026.
(1.) See Press Release (2-18-2004), at: www.publicdebt.treas.gov/com/comtdhhw.htm.
(2.) 31 CFR [section] 352.2(e)(1)(i).
(3.) 31 CFR [section] 352.10.
(4.) 31 CFR [section] 352.7(g).
(5.) Rev. Rul. 64-89, 1964-1 (part 1) CB 172.
(6.) Let. Rul 9845026.
(7.) 31 CFR [section] 359.25.
(8.) 31 CFR [section] 359.29.
(9.) 31 CFR [section] [section] 359.17, 359.39.
(10.) 31 CFR [section] 359.5.
(11.) 31 CFR [section] [section] 359.8, 359.10, 359.11.
(12.) 31 CFR [section] [section] 359.8, 359.13.
(1.) See 31 CFR [section] 359.14. See also "I Savings Bonds Rates & Terms" at: http://www.treasurydirect.gov/indiv/research/ indepth/ibonds/res_ibonds_iratesandterms.htm.
(2.) 31 CFR [section] 359.10.
(3.) 31 CFR [section] [section] 359.11, 359.15.
(4.) 31 CFR [section] 359.12; see also U.S. Treasury Department, Series I Bonds: Information Statement, p. 6.
(5.) 31 CFR [section] [section] 359.6, 359.7.
(6.) 31 CFR [section] 359.40
(7.) See "I Savings Bonds Rates & Terms" at: http://www.treasurydirect.gov.
(8.) Appendix D to Part 359.
(9.) See Appendix D to Part 359.
(1.) Appendix D to Part 359.
(2.) Appendix D to Part 359.
(3.) Appendix D to Part 359.
(4.) Appendix D to Part 359.
(5.) 31 CFR [section] 359.66.
(6.) 31 CFR [section] 359.66.
(7.) 31 CFR [section] [section] 360.15, 360.16.