Yes you must pay federal income tax on these savings bonds. All bonds are subject to be taxed. If your grandma had the bonds reissued to you and she paid taxes on the bonds before she died then you would be exempt from paying further tax on them.

I would think you would be exempt, if she gave them to you as a gift. I would think she would have picked up the taxes herself.

Grandma didn't pay the tax on the interest -- unless she was one of the very tiny percentage of people that paid tax on it annually -- so her "gift" was the original purchase of the bonds. The interest that they accrued now belongs to grandchild, and is taxable income in the year the bonds are redeemed.

Now ... if the "gift" is actually an "inheritance," then the answer might be a teeny bit different.

You ask your tax professional when you file taxes. They look at the amount, and tell you when you get your taxes done what you need to do. Hope this helps!

I would think you would be exempt, if she gave them to you as a gift. I would think she would have picked up the taxes herself.

well if the gift excide $10000 you have to pay tax.