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Old war bonds are worth big bucks

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Dear Dollar Diva,

I have twelve $1,000, 1941 war bonds? How much would they be worth today?
— Robert

Dear Robert,

The U.S. Treasury savings bond Web site has a wonderful, user friendly “Savings Bond Calculator” that will calculate the value of your bonds for you. It will calculate the value of U.S. Treasury E, EE and I bonds, and savings notes.

According to the calculator, if your bonds are the Series E bonds that were used to finance World War II, they’re worth at least $3,600 each, or a total of more than $43,000 dollars.

You don’t say how you acquired them, but before you start licking your chops, beware of the tax consequences when you redeem these bonds.

Best case scenario

Series E war bonds issued in 1941 stopped accruing interest 40 years after they were purchased. If you inherited the bonds after 1981, the final maturity date, and the tax on the accrued interest was paid by the person you inherited them from, or his estate, you’re home free; you will not have to pay tax on the bonds when you redeem them. But make sure you get a copy of the tax return filed by the decedent or his estate so you have proof that the tax was paid.

Worst case scenario

Each $1,000 Series E bond would have cost $750 when it was purchased in 1941; a dozen of them would have cost $9,000. If you redeemed all 12 bonds, and the interest was taxable to you, you’d have $34,000 in taxable interest to contend with.