Bonds in lockbox

[MichaelL]

Quote:

Originally Posted by gwraigty POA doesn't do any good in the event of death.

Right, for after death you need an executor or a trustee. In any case there needs to be someone with authority to access the lock box. I'd have someone specifically signed up with the bank to save trouble.

[clobber]

Quote:

Originally Posted by GrayHare If those are EE bonds you need to be careful. EE bonds fully mature in 30 years. Unless you've been paying tax on the bond interest annually, the IRS considers all the interest to be paid at full maturity, whether you redeem the bond or not. Those 1988 bonds likely matured in 2018 so they are taxable in year 2018. If you fail to report the income, even if you do not redeem the bonds, you are subject to penalties and interest later.

+1 As I understand it, if you don't pay tax for year 2018, the only way to do it later is to file an amended return. Yuk. Even if you did not redeem them in 2018, act like you did and pay the tax.

Here is a link describing how to do this in Turbo Tax

[footenote]

Quote:

Originally Posted by GrayHare If those are EE bonds you need to be careful. EE bonds fully mature in 30 years. Unless you've been paying tax on the bond interest annually, the IRS considers all the interest to be paid at full maturity, whether you redeem the bond or not. Those 1988 bonds likely matured in 2018 so they are taxable in year 2018. If you fail to report the income, even if you do not redeem the bonds, you are subject to penalties and interest later.

+1
I inherited over $100,000 in EE bonds seven years ago. Because the interest rate was great, I've redeemed them as they mature (30 years).

For a 30-year maturity, about 75% of the final value has been interest. As GrayHare said, this is treated as ordinary income.

Since EE bond interest is income to you when the bond matures whether you've redeemed them or not, create a schedule of maturities to ensure you aren't on the hook for taxes for a bond you haven't cashed.

[Rianne]

2022 for the EE bonds so we're good for those. We bought $100K+ of the I Bonds. Probably just leave them alone until absolutely necessary. We have a living trust, so my DB is the trustee and has all the information in case of our untimely death.

I wonder if we should bring them home and make copies to be on the safe side.

[RE2Boys]

I've cashed several paper EE bonds in the past year at two different B&M banks. Recently it has been very easy, they scan the paper like any other check and the funds are deposited in my checking account. The interest is federal taxable, if near maturity as others mentioned, most of value is taxable interest. Reportable the year the bond matures (30 years from date of issue).
If purchased after 1989, the interest may be eligible for the educational savings bond interest exclusion if you meet the criteria. See: https://www.treasurydirect.gov/indiv..._education.htm

An eligible educational expense is funding a 529 plan, so they could be used to help fund not only a child in college, but also younger children and grandchildren 529 plans.