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Tax Law (Questions About Taxes)/Illinois zero coupon college bonds


If I cashed in an Illinois college bond prior to its maturity date, and am using the proceeds to pay Illinois college tuition, does this come with a tax consequence. I did receive a 1099B, showing the proceeds of $4,698.55, cost basis of $4,498.95 with the gain of $289.60, how should I report this on my taxes. Would I show the gain on a schedule D of the $289.60? Can you help?


Thanks for your question.

The fact you used the proceeds on college tuition is not relevant. You will report a capital gain using Form 8949, then transferring that amount to Schedule D.  However, the proceeds and basis you give only add up to a gain of $199.60.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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