Originally Posted by kaneohe
Sounds like not all reissues are taxable:
Concur, but this is so fraught with exceptions that I hesitated to make a unilateral declaration.
Here's another exception: we own a few EE & I bonds for education, properly titled & purchased and in compliance with all the education-bond requirements-- EXCEPT that they can only be redeemed tax-free when used to pay for tuition
educational expenses and not "extras" like room, board, and misc fees.
So when our kid got her NROTC scholarship (they pay tuition & fees) then I could no longer redeem the education bonds tax-free for educational expenses. Not that I'm complaining; I would have happily cashed them in and paid my taxes.
EXCEPT that I later figured out we could redeem them tax-free by rolling them over to a 529 account, which can be spent on educational expenses other than tuition/fees.
So in other words I couldn't use the bonds tax-free for education, but I could launder them through a 529 to use them tax-free for education.
Pretty intuitive, no?
So yeah, you're right, lots of fine print to read & comply with after checking with a tax lawyer and a CPA.
I've started up nuclear reactors with less paperwork...