How to Report the Sale of US Savings Bond to the IRS

By: Emma Watkins

When you buy bonds, you are lending the seller your money.

savings bonds image by judwick from

Unlike stocks, you do not sell U.S. savings bonds to turn them into cash, you redeem their value plus interest from the government at a predetermined date when the bond matures and the seller has to pay you back the principal you invested and promised earnings. In turn, you have to report the interest the bond yields on your tax return. The seller reports to you your earned interest on IRS Form 1099-INT.

Step 1

Find the amount of interest received on your U.S. savings bond in box 3 of IRS Form 1099-INT. If you earn at least $10 in interest, the seller must send you the form.

Step 2

Report the amount you located in Step 1 on line 8a of IRS Form 1040 or 1040A, whichever you use to file your tax return. If you file it on IRS Form 1040EZ, report your U.S. savings bond interest on line 2. Note that if your total interest from all your investments exceeds $1,500, you may not file your taxes on the 1040EZ.

Step 3

Complete IRS Schedule B, parts I and III, if you earned more than $1,500 in interest from all your investment sources. Part I requires you to list all payers and the earnings you received from each. Part III pertains to foreign investments. Submit the schedule to the IRS with your tax return.

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About the Author

Emma Watkins writes on finance, fitness and gardening. Her articles and essays have appeared in "Writer's Digest," "The Writer," "From House to Home," "Big Apple Parent" and other online and print venues. Watkins holds a Master of Arts in psychology.

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