Bond Income

Today TaxMama hears from Jill in the TaxQuips Forum, with this question. “In 2010, I received a check from the Oregon Department of State Lands for money on an unclaimed bond that my grandmother bought for me years ago. The Oregon State Treasury had me fill out and send a W-9 form in order to get the check. Does this mean that they already took out the taxes? Or do I need to include this as taxable income in 2011? It was a Higher Education 1990B Bond.”

Hi Jill,

 Isn’t it neat that all that unclaimed information can be found online?

Sorry, I wish I could give you an answer about your bond. But YOU were the one discussing this with them.  What did they say about any tax withholding?

 YOU were the one that got the bond cashed and the statement that came with it.  If there was withholding, they should have provided you with that information.

I haven’t got a clue without seeing the paperwork.   Regardless, you will report taxable income, if any, on your 2010 tax returns – not 2011.

One good thing I could tell you though, is that state bond interest is not taxable for IRS purposes.  And if you live in Oregon, there is no state tax either.  However, if you live in another state, you are apt to have to pay state taxes on that interest in your state.  Unless, perhaps, you used the money to pay for education expenses. But you didn’t do that. Did you?

If you have specific questions, and don’t understand the paperwork, give them a call. It sounds as if they were delightful to you earlier.

 And remember, you can find answers to all kinds of questions about bonds and other tax issues, free. Where? Where else? At www.TaxMama.com.

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