When I was young, my grandma would buy me (and my brothers) US Savings Bonds. I am now a grown man, and I am still holding on to them. Well, I have some home improvements coming up, and I could take out a home equity loan or line of credit to pay for them. But I've got these savings bonds sitting there just collecting dust. So I could cash them in and offset the amount of equity I'd have to use for these improvements. But here is my concern. I know that if you cash them in, you have to claim the interest earned on your federal taxes. So let's say I have a $2500 savings bond that is now worth $5000 (so it has earned $2500 in interest). If I would cash that in, how badly would I get hurt come tax time? Can anyone tell me approximately what percentage of that $2500 I would end up having to give back to Uncle Sam? I am just trying to avoid getting myself into trouble, where I'll end up owing $2000 next year. That would pretty much defeat the purpose of cashing them in.
2006-11-14
09:24:27
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4 answers
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asked by
bosco
2
in
United States