EE Savings Bonds Partial Redemption?

[zinger1457]

I have a couple EE Savings Bonds that I inherited that mature in 2023. They are in electronic form and I'm looking at doing partial redemptions for tax reasons, I will be in a higher tax bracket by 2023. I recall reading somewhere when I got the bonds that when doing partial redemptions the withdrawals first come out of the interest earned but now I'm not so sure that's accurate. So if I have a $5K bond now worth ~$18K (~$13K interest) and redeemed $10K then the $10K would be all interest and the full amount withdrawn would be taxable. Is this correct or do they prorate the principle/interest amount?

 

[bingybear]

try this link

If you search your title you get the treasury direct page with your answer that interest comes out first.
I did not see it, but I assume if you take more than the available interest, that would redeem the bond.

And yes you get taxed on the interest.

 

[zinger1457]

Thanks, that's probably where I read it initially. The thing is when I log into treasury direct and go through the steps to do a $8K partial redemption on the bond it breaks down the distribution into principle ($2215) and interest ($5785) which seems to go against what the link states should happen. Total interest earned on the bond is currently ~$13K.