I was gathering all the necessary paperwork to complete my taxes this weekend. One of the forms I received from my bank was a 1099-INT for an EE Savings Bond that I cashed back in April. This was a $1,000 bond that was purchased for me by my grandparents way back when. When I cashed it in, it was worth about $1,300. So my question is about the reportable interest. Should I be paying taxes on entire sale price of bond ($1,300), which is what the bank is reporting to the IRS. Or the amount that the bond increased in value, in this case about $800 ($500 purchase price, $1,300 value when cashed).