The clock on the wall keeps ticking away, bringing closer the time when you should make a decision about those old war bonds you bought World War II.

Most Series E bonds still have years to go before they reach the end of their extended maturity periods; meanshile, they continue to earn interest at the current rate of 8 percent now.

But a final maturity date has been established for the early series. E bonds purchased during the period May 1941 through April 1952 will reach maturity 40 years from the original date of issue, and the Treasury Department says there will be no further extensions.

That means that a bond purchased in May 1941 no longer will earn interest after April 30 this year. And if, like most people, you haven't been reporting the interest income annually, all of the accumulated interest becomes taxable at that point, even if you don't cash in the bonds.

You can avoid current tax consequences by converting your present E bonds, to HH bonds. Tax liability on the accumulated E bonds interest then is deferred until you redeem the HH bonds. (But the semiannual interest on the HH bond is taxable in the year received.)

There is no advantage to holding the E bonds after maturity. If you haven't already done so, make a list of your bonds showing the date of purchase. Then figure the date of maturity from the following table and be prepared to cash in or convert by that date. Issue Date Term: May 1941-Apr. 1952 40 years May 1952-Jan. 1957 39 years, 8 months. Feb. 1957-May 1959 38 years, 11 months. Jun. 1959-Nov. 1965 37 years, 9 months. Dec. 1965-May 1969 27 years. Jun. 1969-Nov. 1973 26 years, 10 months. Dec. 1973-Dec. 1979 25 years.

Question: When inherited Series E bonds are redeemed, is the total accumulated interest subject to income tax or only the interest that has accumulated since the date of death?

Answer: The accumulated interest on inherited E or EE bonds does not escape income tax. What the present owner (the heir) is responsible for depends on how the interest had beden handled earlier.

If the previous owner (the deceased) had been reporting the interest annually, then the present owner is liable only for the interest accured since the last reported interest.

In most cases, however, the prior owner will be found to have deferred reporting the income. You and the executor of the estate then have a choice.

If the executor files a final income tax return for the person who has died, he can elect all of the accummulated interest up to the death, as "income in respect of the decedent."

In that case, you, the heir, are taxed only on interest accruing since that date, because you never have to pay federal income tax twice on the same income.

If the interest is to be included in a final return, then the heir is responsible for reporting and paying tax on all of the accumulated interest when the bond is redeemed or reaches final maturity.

A determination as to which way to go should be based primarily on the relative tax brackets of the decedent and the heir.

But if you inherited the bonds some years ago and a final tax return was not filed after death, you have no choice but to report all of the accumulated interest on your tax return, as if you had bought the bonds yourself on the original date of issue.

Q I plan to retire from federal civil service soon and will elect a reduced annuity to provide survivorship benefits for my spouse. Do I become a doner subject to federal gift tax at the time of declaration? If so, how would I compute the value of the gift?

A: The election of survivor benefits does not constitute a complete gift in the eyes of the IRS, and does not make you liable for gift tax.

However, should you die before your spouse, then the value of the annuity may be included in your estate for federal estate tax.

The present value at the time of your death of an annuity that is to continue for the lifetime of your spouse is based on the amount of the annual payments and the age (and corresponding life expectancy) of your spouse on the date of your death.

The IRS provides tables for computing the present value, and the civil service personnel will help in determining estate tax ability. IRS Publication 721, "Comprehensive Tax Guide for U.S. Civil Service Retirement Benefits," is a helpful information source.