EE Savings Bonds Gift an existing bond ?

[Lakewood90712]

in 1992 I bought the max 30k . Now maturity is close. They are going to be taxed at 22 - 24 % % using current tax bracket. ? can I gift them to a relative in a low tax bracket ?. From what I can see , it looks like no, but not sure.

 

[COcheesehead]

The tax is on the giver.

 

[Lakewood90712]

The tax is on the giver.

Not looking at gift tax aspect , looking at deferred tax on the bond , due at redemption. Purchase for 1k face value was $500 , interest will be approx. $1550 on each bond at time of redemption.

The gift tax aspect is a different ball of wax.

 

[RE2Boys]

While I have not digested the in/out outlined in this article, it may be of some help.

https://finance.zacks.com/can-transfer-ownership-savings-bond-godchild-7794.html

 

[Lakewood90712]

While I have not digested the in/out outlined in this article, it may be of some help.

https://finance.zacks.com/can-transfer-ownership-savings-bond-godchild-7794.html

That was good hunting !

Ok , says EE bond can be re issued with a co-owner. Says either co-owner can cash bond.

Will have to verify with treasury if this particular type of re issue triggers tax reporting at time of reissue.

And if it is the cashing co owner that incurs the accumulated interest earned tax liability.

 

[Gill]

You may add a co-owner to your bonds but when the bond is redeemed the full amount of the interest will be taxed to you. The reissuing doesn’t trigger the tax. There is no way to escape paying the tax on the income accrued while you were the owner or co-owner of the bond. It will be taxed to you as the original owner. See Treasurydirect.gov.

Gill

 

[Lakewood90712]

Looking at the Treasurery direct site, never realized the difference from the guaranteed rate on these older EE bonds, and the floating rate. On these 1992 bonds the first 12 years was at 6 % ,The current floating rate is 85 % of the 5 year Treasurery , so the bond is only earning 1.02% That ain't bad for a near zero rate environment, but I should have done something with these years ago.