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My parents recently found a 30-year Savings Bond of mine that matured in 2016. I redeemed it at the bank in late 2019. My understanding is the correct way to handle this is to file an amended 2016 return (before April 15, 2020). I don't want to do this because the bank sent me a 2019 1099-INT for the redemption, so I suspect the IRS will see that I don't report it on my 2019 taxes and either send me a notice or automatically adjust my return, in which case I end up paying tax on the interest twice. It's hard for me to believe the IRS is advanced enough to see a 2019 1099-INT but realize it's for a Treasury bond that matured in an earlier year. So can I just report it on my 2019 return and pay the tax this year? I have to imagine this is a common occurrence, and most people have no idea about the rules, and would do exactly that.

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    Since you didn't redeem the bond until 2019, I think your assumption that you need to amend the 2016 return is incorrect. The taxable event is the redemption, not the maturation. – chepner Jan 25 at 19:47
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    @chepner That would certainly make things easier, but according to treasurydirect.gov/indiv/research/indepth/ebonds/…, you owe interest when the earlier of either (1) you redeem the bond or (2) it reaches final maturity. Everything I find online seems to confirm this. – Craig W Jan 25 at 20:44
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    Ah, OK. I'm not sure if I should leave my comment (and your response) as a clarification of the question, or just delete the evidence of my ignorance :) – chepner Jan 25 at 20:59
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    Note this is a Savings Bond, which is not what the words 'Treasury bond' normally mean in a finance context. Savings Bonds have special tax status; for a standard (marketable) bond you must report and pay tax on the interest and any OID (amortized discount) every year, for a Savings Bond you can defer until maturity redemption or sale -- but as noted, not after that. (In some cases, but not this one, you can exclude the income entirely if the bond is used for higher education expenses.) – dave_thompson_085 Jan 26 at 6:21
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    Ah - I feel your pain. I once needed to amend 3 consecutive years for a similar reason, and as it was near the refund statute limit I mailed them all together. Mistake. They were processed out of sequence and rejected, and it took two years for Appeals to resolve. I agree with taking the tiny risk, and wish you luck. – dave_thompson_085 Jan 30 at 10:06

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