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EEBOND INTRODUCTION Congratulations on your purchase of EEbond. EEbond maintains a database and determines the value of Series EE and Series E Savings Bonds as well as US Savings Notes. EEbond operates in a mouse point-and-click windows-like environment. EEbond will still operate excellent in a keyboard environment. EEbond utilizes the power of Borland International's Paradox(c) Database Engine which is one of the most powerful databases on the market. With EEbond, you will never have to purchase another savings bond program. Quick Start For those of you who just want to get going, we have the quick start section. 1. Install program. 2. Enter EEbond and hit return (if program is installed). 3. Click on Accept, Alt A, or hit the ENTER key. 4. Click on File or Alt F. 5. Click on New or F4 for creating a new file. 6. Type a name in for the new database you wish to create. EEBond will put the extension on so you don't have to. Next, click on the OK button or ENTER key to accept. 7. Click on Data or Alt t for editing, then click on Edit or the F8 key. 8. Enter in savings bond data and click on the Add button or Alt A. Remember, you must enter at least the Serial Number, the Type(EE, E, or S), the Face Value, the Issue Month and the Issue year. Use TAB key or mouse to advance fields. 9. Click on Exit or Alt E to finish the editing. 10. Click on Reports or Alt R and Click on Screen. Report will generate on screen. F2 will close the report window. 11. That's all there is to it. TABLE OF CONTENTS 1 Installation 4 What You Get 4 Install EEBond 4 Starting the Program 4 Importing data from old versions 4 2 Getting Started 5 File 5 Data 5 Reports 5 Config 5 Utilities 5 Registration 5 Help 5 3 Edit Data 6 Enter Bond Data (Your Series EE Savings Bonds) 6 Ditto or Copy 6 4 Reports 6 Screen 6 Print 6 ASCII File 6 ASCII Comma Delimited File 6 Cumulative Bond Summary 6 Projected Bond Summary 6 5 Config 7 Printer 7 Redemption Date 7 Sort Method 7 6 Utilities 7 Import older versions of EEBond 7 Import Table of Redemption Values 7 7 Backup 8 8 Restore 8 9 The Latest Savings Bond Information 9 10 Common problems 21 11 Limited Warranty 23 12 Customer Service 24 13 Special - Importing Data from other programs 25 INSTALLATION What You Get 1) EEBond.exe The EEBond program. 2) EEBond.doc The EEBond manual. 3) EEcfg.db Configuration information. DO NOT DELETE or attempt to open. 4) Govtbl.db Tables of redemption values. DO NOT DELETE or attempt to open. If you absolutely must see the insides of these files, the use PARADOX 4.0. 5) Govtbl.px Government Table Index. DO NOT DELETE. 6) Readme.txt Last minute information. In printable ASCII format. Install EEBond Installing EEBond is easy. Put Disk into your drive and type INSTALL. EEBond will do the rest. The installation program will call up EEBond after it is installed. If you wish to install on a diskette, and not on a hard drive: From the diskette: From the Master Disk, type in LHA E EEBond.LZH B:. This will work if you put the master disk in drive A, and a blank formatted disk in drive B. This will put the EEBond.exe and the two system .db files on drive B. Starting the Program Go into the directory containing the EEBond.exe program, and type EEBond and hit the ENTER key. Importing Data from earlier versions of EEBond Version 8 and up are fully compatable with later versions. There is no need to import if you have these versions. Importing Data from EEBond version 1-7, Ebond versions 1-5 and SNotes version 1-5 is simple: Steps: 1. Make sure that both your *.dat files and *.idx files from the earlier versions are in the same directory that you will be running your conversions from. 2. Open a file that you wish to import into or create a new one. 3. Click on Utilities or hit Alt U, and make selection. 4. Select file you wish to import (.dat extension). 5. Select corresponding index. It should be the same name with an extension of .idx.GETTING STARTED Program Capabilities EEBond main menu consists of File, Data, Reports, Config, Utilities and Registration. You can easily get to any of these menu items by using the highlighted letter in the name in combination with the ALT key. (ex. ALT F for File). File Open(F3) open an existing file. New(F4) create a new file. Delete(F5) delete an existing file. SaveAs(F6) rename a file. Exit(Alt-X) leave the program. Data Edit(F8) Various editing functions on a file. Reports Screen(Alt F1) Display a report on the screen. Print(Alt F2) Print a report. Ascii(Alt F3) Send a report to ASCII file. ASCII - Comma Delimited Good for importing to spreadsheets. Cumulative Bond Summary Cumulative totals. Projected Bond Summary Simple Interest figures. Config Printer(Ctrl F1) Select printer Redemption Date(Ctrl F2) Allows you to change the redemption date. You must use a date valid for the current six month redemption table. Sort Method (Ctrl F3) Select the way you would like to sort the reports. Utilities Import EEBond Ver 1-7 (CtrlF4) Import versions 1 through 7 of EEBond. Import Ebond Ver 1-5 (CtrlF5) Import versions 1 through 5 of Ebond. Import Snotes Ver 1-5 (CtrlF6) Import versions 1 through 5 of SNotes. Import Tables of Redemption Values Gives instructions on importing Tables of redemption values from DOS prompt. Program Support IMPORTANT-Please Read:(F9) Support Information Help Click on HELP or enter F1 from the main screen. EDIT DATA(F8) EEBond comes to you completely updated with the most current tables from the Bureau of the Public Debt. You will be presented with a data entry screen where you can enter and edit your savings bonds. If you have a mouse, you can click on all menu options and buttons, or you can use the Hotkeys. The Hotkeys are the highlighted letters on the menubar. You can access them by pressing the Alt key from your keyboard and pressing the letter, or you can press the function associated with the menu item. The "must enter" fields are Serial Number, Type (EE, E, S), Face Value and Issue Date. After entering a bond, either click on the Add button or hit the ENTER key. After updating an already existing bond, click on the update button. When you are finished with the edit screen, click on the Exit button. You can jump from field to field using the tab key if you don't have a mouse. If you want to move backwards, use the SHIFT TAB combination. Ditto or Copy If you want to ditto a bond, just bring up the bond you want to copy, make a change to the Serial Number and any other field you want and just hit the ENTER key. This will save you from having to re-enter Serial Numbers that are very similiar. Since the Serial Number field is the database key, you CANNOT have duplicate Serial Numbers. REPORTS(ALT R) Screen(ALT F1) The report will generate on the screen in a report window. You can use your mouse and move the report by the scroll bar or use your keyboards arrow and page keys. Print(ALT F2) The report will generate on the printer. You can change print option from the configure menu. ASCII File(ALT F3) The report will be sent to an ASCII file that you specify. This file is in the same format as the old versions of EEBond. If you have a problem printing, just select the File option, exit the program, and use your DOS PRINT command. ASCII Comma Delimited File(ALT F4) The report will be sent to a comma delimited ASCII file. This is convenient if you wish to put the report data into a spreadsheet file. CONFIG(ALT C) Printer(CTRL F1) This option will let you either select a standard ASCII printer or select different modes to print on a laser printer. Redemption Date(CTRL F2) From this menu, you can enter in a new redemption date to see what your bonds will be worth in the future. You can only type in dates that would be valid during the interval that is covered for this redemption period. The program will scan the loaded Table of Redemption Values (GOVTLB.DB) and check to see if the date that you specified falls within the range of the table. The date that you see when you bring up this item is the date from your system. Change this date and generate the new reports. When you come back into this field, you will see the system date again. Your changes to the redemption date will be valid until you select this option again, when once again the redemption date will revert back to the system date. You can change the fields by either clicking twice with your mouse or using the TAB key until the field is highlighted. Sort Method(CTRL F3) You have the option to sort the reports by Type, Serial Number or Issue Date. UTILITIES(ALT U) Import older versions of EEBond(CTRL F4, F5, F6) You only need to use this option if you have Versions 1-7 of EEBond, Versions 1-5 of SNotes, or Versions 1-5 of Ebond. All other versions of EEBond are fully compatable AND DO NOT NEED TO BE IMPORTED. Importing Tables of Redemption Values(CTRL F7). EEBond has the ability to import the ASCII tables of redemption values which are issued from the Bureau of the Public Debt. You can acquire these tables from the Economic BBS at (202)482-1986 or (202)482-3870. The file you must download is called CRVINFO.EXE. After decompression, the ASCII file that we are interested in is called CRVTABLE (a sample is inclosed). The subscription fee at the time of this writing is $35 year. There is also a per minute charge. Remember, I will continue to update the program and offer it to you for only $10 every six months. This will get you not only the current tables but also all program enhancements (a much better deal)! Before proceeding with the import, I highly recommend that you backup all of your files. IMPORT will delete the old GOVTBL.DB file SO BACK UP both the GOVTBL.DB and GOVTBL.PX file! You never know when something could go wrong. In order to input the latest tables, you must exit the program and type "IMPORT CRVTABLE" from the DOS prompt. The import program will show the progression and will be completed in approximately 15 seconds. Make sure that the tables it creates are put into the same file as your EEBond.EXE file.BACKUP It is always a good idea to periodically backup your databases. Simply copy all of the files to diskette. This way you maintain backups of all your databases and the main EEBond program. You can make as many copies of the program as you wish. RESTORE When you need to restore, copy all of the files from the backup floppy diskette to the location of your EEBond files. This will bring you to your most recent update. SAVINGS BOND INFORMATION CALCULATION OF THE MARKET-BASED INTEREST RATE ON U.S. SAVINGS BONDS Determination of Savings Bond Redemption Values Series EE and E U.S. Savings Bonds and U.S. Savings Notes (Freedom Shares) held at least five years earn a market-based rate or a guaranteed rate, whichever is higher during the time the Bond is held (or since November 1982 if the Bond was issued before that date). Determination of the Market-Based Rate The market-based rate is 85 percent of the average market yield, during the time the Savings Bond is held, on Treasury marketable securities with five years remaining to maturity. For Savings Bonds in maturity periods that began before May 1989, this rate is rounded to the nearest 1/4 percent. Five-year Market Yields on Treasury Securities The market yields used to determine the Savings Bonds market-based rate are averages of the Treasury 5-year Constant Maturities, calculated daily and averaged monthly by the Department of the Treasury. The Constant Maturities are published weekly by the Federal Reserve and are a familiar measure of market yields used by the financial industry, for example, to set rates on many adjustable mortgages. "Yields on Treasury securities at "constant maturity" are interpolated by the Treasury from the daily yield curve. This curve, which relates the yield on a security to its time to maturity, is based on the closing market bid yields on actively traded Treasury securities in the over-the-counter market. These market yields are calculated from composites of quotations reported by five leading U.S. Government securities dealers to the Federal Reserve Bank of New York. The constant maturity yield values are read from the yield curve at fixed maturities, currently 1, 2, 3, 5, 7, 10, and 30 years. This method provides a yield for a 10-year maturity, for example, even if no outstanding security has exactly 10 years remaining to maturity." (Preceding paragraph taken from Federal Reserve rate table.) Facts About Series EE & HH Savings Bonds The Series EE Bond is an appreciation-type security that has an original maturity of 18 years and an interest-bearing life of 30 years. Its purchase price is 50 percent of its face amount; for example, a $100 Bond costs $50. Denominations (face amounts) available are $50*, $75*, $100, $200, $500, $1,000, $5,000, and $10,000. The Series HH Bond is available in exchange for Series E, EE and/or U.S. Savings Notes (Freedom Shares) with a total redemption value of $500 or more. It is a current-income security, available at par in denominations of $500, $1,000, $5,000, and $10,000, and has an interest-bearing life of 20 years. Complete Safety U.S. Savings Bonds are guaranteed as to principal and interest by the full faith and credit of the United States. If lost, stolen, mutilated, or destroyed, the Bonds will be replaced by the Treasury Department at the owner's request. Market-Based Interest; Minimum Rate The interest rate on Series EE Bonds held five years or longer is 85 percent of the average return on 5-year Treasury marketable securities during the holding period, compounded semiannually, if it averages more than the minimum guaranteed rate. Bonds redeemed before being held five years earn interest at a 4 percent annual rate. Bonds purchased on and after March 1, 1993, have a minimum guaranteed rate of 4 percent. Bonds purchased between November 1986 and February 1993 have a minimum guaranteed rate of 6 percent when held at least five years, through their 12-year original maturity; Bonds purchased through October 1986 are guaranteed to earn a minimum of 7.5 percent through their 10-year original maturity. Older Series E and EE Bonds and Savings Notes are receiving market-based rates. Minimum rates vary according to issue dates and when a Bond last entered an extended maturity period. Payment of Interest Interest on EE Bonds issued March 1993 or later accrues through monthly increases in redemption value, and is payable when a Bond is cashed. Interest accrues semiannually on most older EE and E Bonds. The redemption value reflects the principal amount plus interest accrued during the holding period. Interest on HH Bonds is paid semiannually. Easy to Buy Where offered by employers, the Payroll Savings Plan permits Series EE Savings Bonds to be purchased through regular allotments from pay. Bonds also may be ordered at most banks and other financial institutions. The Bond order will be forwarded to the Federal Reserve Bank which will issue and mail the Bonds to the purchaser or intended recipient. HH Bonds may be obtained only in exchange for Series E/EE Bonds and Savings Notes at Federal Reserve Banks and Branches and from the Bureau of the Public Debt, Parkersburg, WV 26106-1328. Most Savings Bonds issuing agents will forward exchange applications for customers. Easy to Redeem Series EE Bonds may be redeemed at any time after six months from issue date at most banks or other financial institutions. HH Bonds are redeemable at any Federal Reserve Bank or Branch, or at the Bureau of the Public Debt, Parkersburg, WV 26106-1328, any time after six months from issue. Tax Benefits Reporting of interest for Federal income tax purposes may be deferred until EE Bonds are cashed disposed of, or reach final maturity, whichever comes first. Reporting of accrued interest on Bonds and Notes presented in exchange for HH Bonds may continue to be deferred, for Federal tax purposes, until the HH Bonds are cashed, disposed of, or reach final maturity, whichever comes first. EE and HH Bonds are exempt from state and local income and personal property taxes but are subject to inheritance and estate taxes levied by states and localities. Subject to certain income and other limitations, Bonds purchased beginning January 1, 1990, may be free of Federal income tax if their owners pay qualified educational expenses for themselves or their dependents in the year the Bonds are redeemed. Exchange Privilege Six months after issue, Series EE Bonds may be exchanged˛alone or in combination with eligible Series E Bonds or U.S. Savings Notes˛for current-income Series HH Bonds. The Bonds and Notes applied toward an exchange must have a total redemption value of $500 or more. HH Bonds issued in March 1993 or later pay interest at a 4 percent annual rate. Choice of Registration All Bonds may be issued in the name of one person: in the names of two persons as co-owners; or in the name of one person as owner, with a second person as beneficiary. No Probate If, upon the death of an owner, there is a surviving co-owner or beneficiary named on the Bonds, the Bonds do not form a part of a decedent's estate for probate purposes. Subject to applicable estate or inheritance taxes, if any, they become the sole and absolute property of the survivor. Redemption Value Tables Tables of Redemption Values for Savings Bonds are published regularly and are available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. Banks can also provide information on redemption values to Bond owners. * Not available through payroll savings plans. Questions and Answers About U.S. Savings Bonds What is the market-based interest formula for Savings Bonds? The market-based rate formula sets interest yields on Series EE Bonds held five years or longer and outstanding Series E Bonds and U.S. Savings Notes (Freedom Shares). Market-based rates are set semiannually, in May and November, and Bonds held five years or longer receive the average of semiannual rates in effect during the holding period, compounded semiannually, if it averages more than the guaranteed minimum rate. For Bonds issued since March 1, 1993, there is a guaranteed minimum annual rate of 4 percent no matter how long the Bond is held, up to original maturity, a term of 18 years; these Bonds reach face value in no more than 18 years and will continue to pay interest for 30 years from issue. How is the market-based rate set? Each May 1 and November 1, the Treasury computes the average daily market yield during the preceding six months on Treasury marketable securities with five years remaining to maturity. The Savings Bonds rate is set at 85 percent of the market average. At the end of five years, the average of the 10 semiannual rates, compounded semiannually, determines a Bond's five-year yield. If a Bond is held for six years, 12 semiannual rates are averaged, and so on. Bonds issued in March 1993 or later and held less than five years earn interest at a 4 percent annual rate. I hold Bonds purchased before March 1993. Do they now get the 4 percent minimum rate? All Bonds with minimum rates higher than 4 percent continue to receive those higher rates as their minimum to the end of the maturity period that was in effect before March 1993. As Bonds enter new extension periods, they will begin to receive the minimum rate prevailing at that time. Under current market conditions, persons holding Bonds with higher minimum guarantees have every incentive to retain them. How long do Bonds earn interest? Outstanding Savings Bonds will earn interest for the following number of years: 40 years, Series E Bonds issued though November 1965; 30 years, Series E Bonds issued from December 1965 through June 1980, Series EE Bonds, U.S. Savings Notes, Series H Bonds; 20 years, Series HH Bonds. Is there a limit on the amount of Savings Bonds a person may buy? Yes. The annual limit on the amount of Series EE Bonds an individual may buy is $15,000, issue price ($30,000, face amount). This limit applies to the amount of Bonds that may be purchased in the name of any one person in any one calendar year; it has no effect on cumulative holdings. Purchasing Bonds in co- ownership form can effectively double the limit, assuming the co- owner has purchased no other Bonds. There is no limit on the amount of HH Bonds that may be issued in exchange for Series E and EE Bonds and Savings Notes, or purchased with the redemption proceeds of matured Series H Bonds. What is the best way to buy Savings Bonds? The simplest, most convenient way to purchase Bonds is through the payroll savings plan offered by thousands of companies and organizations, including the U.S. government and many state and local governments. Through the plan, an employee can arrange with his or her company to set aside a certain amount of money each payday to buy Savings Bonds. Savings Bonds may also be purchased through most commercial banks and other financial institutions throughout the country. Where can I get more information on Savings Bonds? Current rate information can be obtained toll-free by calling a recorded message at 1-800-4US BOND (1-800-487-2663). Other information can be obtained from many financial institutions, Federal Reserve Banks and Branches, and Savings Bonds Division District Offices. Information on replacing lost or stolen Bonds, or reissuing existing securities, can be obtained by writing to the Bureau of the Public Debt, Parkersburg, WV 26106-1328. Department of the Treasury U.S. Savings Bonds Division March 1993 12 GOOD REASONS FOR BUYING U.S. SAVINGS BONDS Revised March 1993 1. COMPETITIVE INTEREST RATES Series EE U.S. Savings Bonds held five years or longer earn market-based interest or a guaranteed minimum rate, whichever is higher, compounded semiannually. Semiannual rates are announced on May 1 and November 1. 2. GUARANTEED MINIMUM RETURN Once you have held your March 1993 or later* EE Bond for six months it is guaranteed a minimum annual rate of four percent, compounded semiannually. Interest is added to the value of your Bond every month. 3. TAX EXEMPTIONS Interest earned on U.S. Savings Bonds is exempt from all state and local income taxes. 4. DEFERRED REPORTING OF INTEREST FOR FEDERAL TAXES Interest earned is not subject to Federal income taxes until the Bonds are cashed or reach final maturity in 30 years. Taxes may be deferred further if Bonds are exchanged for Series HH Bonds. 5. PEACE OF MIND IN RETIREMENT You can cash Savings Bonds to supplement your retirement income. Or, you can produce regular income by exchanging Series EE Savings Bonds for HH Bonds, which pay interest semiannually. The annual yield on HH Bonds issued March 1993 or later* is four percent, taxable annually but exempt from State and local income taxes. 6. CASH ON DEMAND One of the best benefits of U. S. Savings Bonds is cash when you need it. You can cash Bonds any time after six months from purchase. Interest accrues monthly for 18 years and there are no penalties associated with cashing Bonds before maturity. 7. COLLEGE COSTS MADE EASIER U.S. Savings Bonds may provide tax savings when used to finance higher education. See Treasury Department publication "U.S. Savings Bonds for Education" for details. 8. EASY TO BUY You can buy Series EE Savings Bonds through the Payroll Savings Plan where you work or through over-the-counter purchases or the Bond-a-month plan where you bank. 9. STRENGTHENING AMERICA Buying U.S. Savings Bonds is patriotic. You earn interest while you help your country. Savings Bonds sales reduce borrowing costs for the Treasury and taxpayers. 10. NO COMMISSIONS OR MAINTENANCE FEES You pay no fee or commission to buy or redeem Savings Bonds. 11. GUARANTEED SAFE If lost, stolen or destroyed, U.S. Savings Bonds can be replaced, without charge. Remember to keep a record of the serial numbers of your Bonds. 12. UNSURPASSED RELIABILITY U.S. Savings Bonds are backed by the full faith and credit of the United States. * Bonds issued before March 1993 retain their existing guaranteed minimum rates until they enter a new extended maturity period. For more information write to: U.S. Savings Bonds Division Department of the Treasury Washington, DC 20226 QUESTIONS AND ANSWERS ABOUT THE EDUCATION SAVINGS BOND General Terms & Conditions Q1: What is the Education Savings Bond Program? A1: The Education Savings Bond Program permits qualified taxpayers to exclude from their gross income all or a portion of the interest earned on eligible Series EE Savings Bonds bearing issue dates after 1989 and registered in the name of a taxpayer age 24 or older at the time of issuance. To qualify for this exclusion, tuition and other educational expenses must be incurred by the taxpayer, the taxpayer's spouse or the taxpayer's dependent at certain post-secondary educational institutions. In addition, there are income limitations on those eligible to participate in the program. The Education Savings Bond Program was authorized by the Technical Corrections and Miscellaneous Revenue Act of 1988. Q2: Is there a new series of Bonds which must be purchased to take advantage of the program? A2: No, Series EE Savings Bonds, widely available for purchase through financial institutions and through payroll savings plans, are used for the program. Q3: What educational expenses are eligible for the program? A3: Eligible educational expenses include tuition and fees (such as lab fees and other required course expenses) required for the enrollment of or attendance by the taxpayer, or the taxpayer's spouse or dependent at an eligible educational institution. However, expenses relating to any course or other education involving sports, games, or hobbies are eligible only if required as part of a degree or certificate granting program. Room and board, as well as books are not included as eligible expenses. Eligible expenses are calculated net of scholarships, fellowships, employer-provided educational assistance, and other tuition reduction amount and must be incurred during the same tax year in which eligible Bonds are redeemed. Q4: What qualifies as an eligible educational institution? A4: Post-secondary institutions, including vocational schools, that meet the standards for participation in federal financial aid programs (such as guaranteed student loan pro- grams) qualify for the program. Proprietary institutions, such as beautician or secretarial schools, generally do not qualify. Q5: Can all outstanding Bonds be used in this program? A5: No, the program took effect on January 1, 1990, and applies only with respect to Series EE Bonds issued after December 31, 1989. No Savings Bonds issued before that date will provide excludable interest nor is any other series of Bonds (e.g., Series HH) eligible for the program. Q6: Can anyone purchase these Bonds and take advantage of the exclusion? A6: No, to exclude interest earnings on Series EE Bonds issued after 1989, a taxpayer must be at least 24 years old before the Bonds' issue date. Since a Series EE Bond's issue date is the first day of the month in which the taxpayer purchases the Bond, the taxpayer must be 24 years old before the first day of the month in which the Bond is purchased. Furthermore, if the taxpayer is married, the taxpayer must file a joint return in order to exclude the Bond interest from income. Q7: Can anyone take advantage of the interest exclusion by purchasing Bonds as gifts? A7: No, the purpose of this program is to benefit the taxpayer(s) paying for qualified educational expenses of the taxpayer, taxpayer's spouse, or taxpayer's dependent within the meaning of section 151 of the Internal Revenue Code. To exclude the Bond interest from gross income, the Bond must be in the name of the taxpayer or in the name of the taxpayer and the taxpayer's spouse who pays qualified educational expenses and not in the name of the dependent. The designation of the dependent as beneficiary is permitted. Q8: What about registering the Bond in the parent and child's name as coowners? A8: For purposes of eligibility for this program only, the designation of a child as coowner with his or her parent is not permitted. Bonds must be in the name of the taxpayer, with or without a beneficiary, or in the name of the taxpayer and the taxpayer's spouse as coowners to exclude the Bond interest from the taxpayer's gross income. Q9: Does the Education Bond feature affect Savings Bonds that have been or are being purchased by a parent registered in the name of a child alone, or the child's name with the parent as beneficiary? A9: No, the Federal income tax rule that applies to such Bonds remains the same. For a child under 14, only the interest and dividend income in excess of $1,200 is taxed at the parent's rate in 1993. (This figure is indexed for inflation annually). If the child is 14 or older, all income is taxed at the child's rate. You may choose between annual or deferred reporting. Either method, used properly, and taking into account your child's age and expected future earnings should reduce tax liability. However, interest earnings on such Bonds do not qualify for gross income exclusion under the terms of the education feature. Q10: Do both the principal and interest from Bonds redeemed during the year have to be used for qualified educational expenses to exclude the Bond interest from gross income? A10: Yes, only if the taxpayer pays qualified education expenses equal to or greater than all proceeds (i.e., interest and principal) from Bonds redeemed during the year can all interest accrued on such Bonds be excludable from his or her gross income. Q11: What if the amount of the Bond redemption proceeds exceeds the amount of the qualified educational expenses? A11: If the amount of the redemption proceeds from all eligible Bonds redeemed during the year exceeds the amount of the qualified educational expenses paid during such year, the amount of excludable interest will be reduced by a pro rata amount. For example, if the Bond proceeds amounted to $10,000 ($5,000 principal and $5,000 interest) and the qualified educational expenses are $8,000, the taxpayer would only be able to get an exclusion for 80 percent of the interest earned or $4,000. Q12: Are there income limitations on the program? A12: Yes, the full interest exclusion is only available for married couples filing joint returns with incomes of up to and including $68,250 (modified adjusted gross income) and for single filers with incomes of up to and including $45,500 (modified adjusted gross income). These are the limits in effect in 1993. Q13: What is modified adjusted gross income? A13: For purposes of this program, modified adjusted gross income means the sum of the taxpayer's adjusted gross income for the taxable year, including interest on U.S. Savings Bonds before exclusion. It also includes the gross income earned by citizens or residents of the U.S. living abroad and income from sources within Guam, American Samoa, the Northern Mariana Islands, and Puerto Rico. Q14: What benefits, if any, are there for taxpayers who file jointly with modified adjusted gross incomes above $68,250 (or $45,500 for single filers)? A14: The interest exclusion benefits will phase out for joint filers with 1993 modified adjusted gross incomes of between $68,250 and $98,250 ($45,500 and $60,500 for single filers) by a decreasing percentage above the threshold income level. For example, a taxpayer filing jointly with a modified adjusted gross income (AGI) of $83,250 would only be able to take advantage of one-half of the exclusion, while a taxpayer filing jointly with a modified AGI of $92,250 would only be allowed an exclusion of 20 percent of the eligible interest income. A similar phase out plan will be employed for the single filer. Note: Married individuals filing separately will not be able to take advantage of the program regardless of their incomes. Q15: Are these income limits adjusted for inflation? A15: Yes, these income limits are indexed for inflation and then rounded to the nearest multiple of $50. Procedures Q16: How does one buy an "Education Savings Bond?" A16: Since the program utilizes the Series EE Bond, there are no differences in purchase procedures except (1) the Bond must have been purchased after December 31, 1989, (2) it must be registered in the taxpayer's name alone, with or without a beneficiary, or in the name of the taxpayer and spouse (not a dependent child) as coowners, and (3) the taxpayer must be at least 24 years old before the issue date of the Bond. Otherwise, the Bonds may be purchased in the same manner as any other Series EE Bond. Q17: Where can I buy Series EE Bonds? A17: Savings Bonds can be purchased through more than 40,000 financial institutions nationwide or through employers offering the payroll savings plan. Participants enrolled in payroll savings plans who intend to use the redemption proceeds of Series EE Bonds issued after December 31, 1989, for eligible educational expenses should review the form of registration being used to ensure it meets the requirements of the law. Q18: Are there limitations on the denomination of the Bonds used in the program? A18: No, any Series EE Bond denomination, from $50 to $10,000, is eligible for the education Bond program as long as the other criteria for the program are met. Q19: Is there a limitation on the number or amount of Bonds one can buy for use in the program? A19: Yes, the standard limitation of $30,000 face value or $15,000 purchase price ($60,000/$30,000 for husband and wife holding Bonds as coowners) in Bonds per year also applies to the education Bond program. However, there is no limit to the amount of Bonds that can be accumulated for educational expenses over time as long as these Bonds do not exceed the annual purchase limitations discussed above and otherwise comply with program requirements. Q20: What are the redemption procedures for holders of qualified Bonds? A20: There are no changes in the redemption procedures for paying agents. It is the Bond owner's responsibility to maintain a record of Bond redemption transactions to support claims for exclusion from gross income in the year that qualified Bonds are redeemed and qualifying educational expenses are incurred. However, if an owner redeeming Series EE Bonds issued after 1989 states his or her intention to exclude interest from gross income in accordance with the education feature, and is at the same time redeeming Bonds issued prior to January 1, 1990 the paying agent should provide separate redemption values and accrued interest subtotals for Bonds issued prior to January 1, 1990 and for those issued on or after January 1, 1990. If the Bond owner has not made a record of the serial numbers, face amounts, and issue dates, the agent should advise the customer to do so prior to redeeming the Bonds. An optional IRS Form 8818 which provides instructions and space to record this information, can be obtained, like other tax forms, from an IRS distribution center. Q21: How does one exclude the interest income on the tax form? A21: Form 8815, available from the IRS, includes the necessary worksheet and instructions to taxpayers for use in connection with tax returns. Q22: Will the educational institution be required to verify the educational expenses of the taxpayer, taxpayer's spouse or the taxpayer's dependent? A22: Generally no. However, the taxpayer should retain receipts or canceled checks for educational expenses as part of the taxpayer's record to substantiate his or her claim to an exclusion from income of the Bonds cashed. Q23: Can one exchange Series EE Bonds issued before January 1, 1990, for Bonds dated after then in order to make them eligible for the program? A23: No, outstanding Savings Bonds cannot be exchanged for Series EE Bonds. Q24: What happens if Bonds dated before January 1, 1990, are redeemed and new Bonds bought with the proceeds? A24: Accrued interest earnings on the Bonds redeemed are taxable to the owner in the year of the redemption regardless of whether the proceeds are used to purchase new Series EE Bonds. Q25: Who can buy Education Savings Bonds? A25: Anyone, including grandparents and other relatives, so long as the Bonds are registered according to the specifications listed in A16. Q26: Can a child be named as beneficiary on a Series EE Bond for which the interest exclusion will be taken? A26: Yes. Any person may be named as beneficiary without affecting the eligibility of the Bond for exclusion. A child may not be a coowner of such a Bond. COMMON PROBLEMS 1. My savings bonds are not sorting by date. Solution: Make sure that each of your months (between 1 and 9) that you entered has a 0 before it. For example, 4 would be 04 and 8 would be 08. Months 10, 11 and 12 are OK. We only have this problem with the first release of Version 8. All other versions will correct this for new bonds only. 2. The first line of my bond report looks funny and has been doing lots of strange things. The first two lines look something like this: 1 0.0 Jan *9797426411393783880000000.00 0.00 2 LX84847983883 EE 100.00 Jun 82 38.12 64.50 Solution: Go into your Edit Screen and delete the first record. You won't see it, but delete it anyways. This will fix a lot of problems. This is also a problem that has been fixed since the first release of Version 8. 3. How can I go backwards on the Edit Screen without having to key through the whole screen. Solution: Use the SHIFT TAB key combination. 4. Computing Year to Date interest. Select December of the prior year and compute the interest. Select the current month and compute the interest. Then subtract the two and you have year to date interest. LIMITED WARRANTY THIS PROGRAM IS PROVIDED "AS IS" WITHOUT WARRANTY OF ANY KIND. THE ENTIRE RISK AS TO THE RESULT AND PERFORMANCE OF THE PROGRAM IS ASSUMED BY YOU. SHOULD THE PROGRAM PROVE DEFECTIVE, YOU (AND NOT MMR SOFTWARE) ASSUME THE ENTIRE COST OF ALL NECESSARY SERVICING, REPAIR, OR CORRECTION. FURTHER, MMR SOFTWARE DOES NOT WARRANT, GUARANTEE, OR MAKE ANY REPRESENTATIONS REGARDING THE USE OF, OR THE RESULT OF THE USE OF, THE PROGRAM IN TERMS OF CORRECTNESS, ACCURACY, RELIABILITY, CURRENTNESS, OR OTHERWISE, AND YOU RELY ON THE PROGRAM AND RESULTS SOLELY AT YOUR OWN RISK. MMR Software does warrant to the original licensee that the disk(s) on WHICH the program is recorded be free from defects in materials and workmanship under normal use and service for a period of ninety (90) days from the date of delivery. MMR Software's entire liability and your exclusive remedy shall be replacement of the disk not meeting MMR Software's Limited Warranty and which is returned to MMR Software. If failure of the disk has resulted from accident, abuse, or misapplication of the product, then MMR Software shall have no responsibility to replace the disk under this Limited Warranty. THE ABOVE IS THE ONLY WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, THAT IS MADE BY MMR SOFTWARE ON THIS MMR SOFTWARE PRODUCT. THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED BY MMR SOFTWARE AND ALL OTHER PARTIES INVOLVED IN THE CREATION, PRODUCTION, OR DELIVERY OF THIS PROGRAM. THIS WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS AND YOU MAY ALSO HAVE OTHER RIGHTS THAT VARY FROM STATE TO STATE. NEITHER MMR SOFTWARE NOR ANYONE ELSE WHO HAS BEEN INVOLVED IN THE CREATION, PRODUCTION, OR DELIVERY OF THIS PROGRAM SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, OR INCIDENTAL DAMAGES ARISING OUT OF THE USE, THE RESULTS OF THE USE, OR INABILITY TO USE SUCH PRODUCT EVEN IF MMR SOFTWARE HAS BEEN ADVISED TO THE POSSIBILITY OF SUCH DAMAGES OR CLAIM. SOME STATES DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES, SO THE ABOVE LIMITATION MAY NOT APPLY TO YOU. The installation program used by MMR Software was written by Lincoln Beach Software and is entitled First Impression. Lincoln Beach Software reserves all copyright protection worldwide. For further information they may be reached at P.O. Box 1554, Ballwin, MO 63022. Harold Holmes may also be reached on Compuserve at 70700,630. The compression program was written by Yoshi. LHA version 2.12. Copyright (c) Haruyasu Yoshizaki, 1988-91 CUSTOMER SERVICE I can be reached two ways: Compuserve: PPN 71001,762 Mail: Franklin Leibsly MMR Software P.O. Box 7116 Washington, D.C. 20044 SPECIAL - IMPORTING DATA FROM OTHER PROGRAMS Many of you have requested a means to import data from other programs into EEBond. I contacted a SHAREWARE author, Alan Avery, who has written a program called SDF(c) which converts ASCII Comma Delimited files into Paradox(c) 4.0 format (which is what EEBond uses). Since most programs export to ASCII Comma delimited format, I have asked Alan Avery if I could make his program available to EEBond users. He agreed. PLEASE REMEMBER THAT HIS PROGRAM IS SHAREWARE AND SHOULD BE REGISTERED IF YOU USE IT. When you send me your name and address, I will send you this program. Type in SDFCVT and the following files will dearchive: 1. SDF.EXE 2. Order.doc 3. Sitelice.doc 4. SDF.doc 5. Readme.doc 6. command.sdf 7. sample.sdf Please take the time to read the instructions in SDF.DOC. I have included two example files that pertain directly to EEBond: 1. EEBond.DEL Sample Comma Delimited File 2. EEBond.SDF Sample SDF data file which creates TEST.Db. YOU MUST USE THE NAMES IN THIS FILE, IN THIS ORDER, OR THE CONVERSION WILL NOT WORK!!!! use "SDF EEBond.SDF". Constraints on importing to EEBond: 1. Month must be in 01, 02, 03, etc. format. 2. Type must be EE, E or S. It must be capital. 3. Year must be two digit #. (76, 91, etc.). 4. INDEX must be placed in the first field Serial Number. SDF is an excellent program and does a lot more than this. Please read the documentation and don't forget to register.