tax on US Treasury bonds

[szyja]

What is the name of your state?New York
My father resides in the State of Florida.After his death I will inherit substantial amount of money in US Treasury EE bonds .Will I have to pay federal tax and NYS tax on the difference between the the value of these bonds when they were purchased and the amount received when they are sold?If this is the case would it be better if my father sold these bonds prior to his death since Fla(assuming that state tax has to be paid) has no income tax? If the bonds are kept until they mature is the difference between the original price and the price at maturity subject to federal and state tax?

[abezon]

The difference between the purchase price & redemption price is taxed as interest. The interest is taxable unless the bonds are used to pay for qualified education costs.