Cynthia Medina - Page 3

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          The decision to be entered is not reviewable by any other court,            
          and this opinion should not be cited as authority.                          
               Respondent determined a deficiency of $514 in petitioner's             
          Federal income tax for 2000.  The issue for decision is whether             
          petitioner was required to report $3,531 of interest income she             
          received from the redemption of United States savings bonds.                
               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and the accompanying exhibits are                  
          incorporated herein by reference.  At the time the petition was             
          filed, petitioner resided in San Antonio, Texas.                            
                                     Background                                       
               In 2000, petitioner cashed and deposited proceeds from two             
          U.S. savings bonds at Security Service Federal Credit Union                 
          (Security Service).  The bonds were purchased by petitioner's               
          father (Mr. Medina) beginning in 1982.  Petitioner redeemed the             
          first bond on August 23, 2000, for proceeds of $8,001, and the              
          second bond on December 20, 2000, for proceeds of $204.1                    
          Security Service issued petitioner a Form 1099-INT, Interest                
          Income, for interest of $3,531 earned on the redeemed savings               
          bonds.                                                                      
               Respondent issued a notice of deficiency determining that              
          petitioner failed to report as income the interest earned on the            
          savings bonds.                                                              


               1 Amounts are rounded to the nearest dollar.                           




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