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Posted by Edward on February 13, 2008, 10:07 am
Please log in for more thread options Arthur Kamlet wrote:
>> My father bought what I thought were tax free bonds for my daughter in
>> 1990. The bonds matured in 2007. He bought "65,000 California Zero CPN
>> 10-1-07 (Cpn eagles II) Ser 6 OAR 7%, Orig 10% 4-1-10 Book Entry, MTY
>> value $1000 per 1M-G.0. Yld to mat 7.00. No periodic payment." He
>> paid $19,649.55 for the bonds. They matured at $65,000. We do not live
>> in California, if that makes a difference. Do I owe taxes on the
>> difference between 65,000 and 19,649.55, or is there more to it? We
>> have not paid any taxes in any year on these bonds. Thank you very much
>> for any help.
>
>
> Every year the bond owner was supposed to know the tax exempt
> interest accrued for that bond, and do two things:
>
> i) enter that interest on Form 1040 Line 8b, and
>
> ii) add that interest to the cost basis of the bond.
>
>
>
> If the bond was bought as an Initial Public Offerring, the
> original cost plus all the accrued interest until maturity
> should equal the redemption amount. That means no gain
> or loss.
>
>
>
> You said your father paid for the bonds, and you want to know
> if you owe? How did you get involved?
>
>
> And if your state has an income tax, chances are they tax
> California muni bond interest.
My father gave the bonds to my daughter when she was one year old under
the uniform gifts to minors act. I am the custodian.
I received a 1099 every year, with "no information to report" on the
1099-div, 1099-int, and 1099-b.
Thanks again for any help.
--
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