Google Groups no longer supports new Usenet posts or subscriptions. Historical content remains viewable.
Dismiss

Sav Bond Interest

79 views
Skip to first unread message

bh2...@gmail.com

unread,
Oct 19, 2016, 12:23:29 AM10/19/16
to
If TXPYR cashes in a bond in December, will taxpayer be penalized for not sending in estimated taxes on it as it was cashed in January? In other words, does it matter on date of interest paid?

tks all

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>

Alan

unread,
Oct 19, 2016, 11:06:56 PM10/19/16
to
On 10/18/2016 9:22 PM, bh2...@gmail.com wrote:
> If TXPYR cashes in a bond in December, will taxpayer be penalized for not sending in estimated taxes on it as it was cashed in January? In other words, does it matter on date of interest paid?
>
> tks all
>
The interest you receive in December by redeeming a savings bond is 2016
income. As such, that income is used in any calculation that computes
whether you will owe an estimated tax penalty for the year. The 4th
quarter 2016 payment is due 1/17/17.

lotax

unread,
Oct 20, 2016, 11:34:01 AM10/20/16
to
bh2 - yes, you can reduce the underprepayment penalty, probably, because the interest was received near the end of the year. You'll need to use "Schedule AI - Annualized Income Installment Method" found on page 4 of IRS's Form 2210.

And if you've got trouble coping with the massive instructions for that form, you might try to read Internal Revenue Code Section 6654, which is even worse than the instructions with the form.

It can be done. Whether it's worth it to you is another question. Good luck.

Taxed and Spent

unread,
Oct 20, 2016, 4:06:25 PM10/20/16
to
On 10/18/2016 9:22 PM, bh2...@gmail.com wrote:
> If TXPYR cashes in a bond in December, will taxpayer be penalized for not sending in estimated taxes on it as it was cashed in January? In other words, does it matter on date of interest paid?
>
> tks all
>


In addition to the prior two replies, don't forget the possibility of
the Safe Harbor applying to your benefit here.

jmfbahciv

unread,
Oct 21, 2016, 11:14:13 AM10/21/16
to
lotax wrote:
> bh2 - yes, you can reduce the underprepayment penalty, probably, because the
interest was received near the end of the year. You'll need to use "Schedule
AI - Annualized Income Installment Method" found on page 4 of IRS's Form 2210.
>
> And if you've got trouble coping with the massive instructions for that
form, you might try to read Internal Revenue Code Section 6654, which is even
worse than the instructions with the form.
>
> It can be done. Whether it's worth it to you is another question. Good
luck.
>

However, there are exceptions which waive the underpayment penalities and
interest. The OP may not know this.

/BAH
0 new messages