Okay, I am taking a tax class and I am a little confused. Here is the problem Ray and Maria own a U.S. savings bond (series EE) The bonds had a value of $10,000 on January 1, 2006 and their value is $10,700 on December 31, 2006. They have not made an elsection with respect to these bonds.
Does this mean that they have not received any interest so there for it would not be shown on the 1040 tax form. Please HElP!!

From a bank's website today, " Interest is exempt from State and local income tax and federal income taxation can be postponed until you cash your bond or until it stops earning interest in 30 years".