Question

Ken and lynn paid $5,000 to purchase series ee bonds in the name of their​ 11-year-old son. The son has no other​ income, and they are in the 24​% tax bracket. The taxable interest this year will be $400 if an election is made to accrue the interest on an annual basis.
a. Will the child owe any tax on the​ bond?

Answer 1

Answer: No. The child will not owe.any tax on the bond.

Explanation:

Series EE savings bonds are simply low-risk savings products which typically pay interest until the bonds either each 30 years or the owner of the we bonds cash them. Anyone that comes first between the two is done.

Based on the scenario above, the child doesn't owe any tax on the bond. This is because the child has no income and he's still 11 years and shouldn't be taxed.