I Bond partial withdrawal

[imoldernu]

I couldn't find the answer to this on the Federal website.

Has to do with wanting a partial withdrawal of an IBond for tax purposes.

$10K bond now worth $25K...

It looks like a partial withdrawal (let's say $10K) can be made on an electronic bond, but not on a paper bond.
?

 

[Gill]

That is correct. There is no way to make a partial withdrawal of a paper bond.
Gill

 

[wanaberetiree]

I couldn't find the answer to this on the Federal website.

Has to do with wanting a partial withdrawal of an IBond for tax purposes.

$10K bond now worth $25K...

It looks like a partial withdrawal (let's say $10K) can be made on an electronic bond, but not on a paper bond.
?

Convert to an electronic bond first

 

[Rianne]

Convert to an electronic bond first

Easier said than done. I have 10 paper I bonds, a nightmare. I created an account on treasurydirect.gov and can't bring myself to convert. Call it fear of screwing it up. So they shall sit in our lock box until we cash them. It's causing a pain in the ass because that investment is outside our trust and will create probate situation for our beneficiaries if we die. We will go over our income level for ACA if we cash them. Between a rock and a hard place.


BTW I really like your quote.

 

[Gill]

Ten bonds are easy to convert. I converted over one hundred several years ago. If you have 10 bonds why not redeem one of them with a value of about $2,500 I would assume.



Don't worry about probate. In most states there is no probate with $25,000 of assets. Also, have you considered using a POD designation which avoids probate?
Gill

 

[Rianne]

Ten bonds are easy to convert. I converted over one hundred several years ago. If you have 10 bonds why not redeem one of them with a value of about $2,500 I would assume.



Don't worry about probate. In most states there is no probate with $25,000 of assets. Also, have you considered using a POD designation which avoids probate?
Gill

Value > $150K for all. That's including interest. But interest kicks us in over ACA income limit. This year, redeeming one would not work. Next year we'll have to figure this out.

 

[imoldernu]

Value > $150K for all. That's including interest. But interest kicks us in over ACA income limit. This year, redeeming one would not work. Next year we'll have to figure this out.

Yes... same kind of problem. A single Bond bought for $10,000 now worth $27,000. Trying to stay under the taxable income.

Don't want to break our record of not having to pay federal or state taxes since 1989.

 

[Alan]

I’ve converted a load of paper I-Bonds to electronic in the past, and I don’t recall it being too much hassle. It was certainly a whole lot easier to manage once they were online. We cashed them in slowly after we retired even though back in the day we bought the max of $30k as a single bond one year. The contributions limit was greatly reduced shortly after that.

 

[HtownRose]

This is great - I didn't realize partial withdrawals were allowed. Will be able to manage tax consequences much more easily now that I know this - thank you for bringing this to my attention!

 

[wanaberetiree]

Easier said than done. I have 10 paper I bonds, a nightmare. I created an account on treasurydirect.gov and can't bring myself to convert. Call it fear of screwing it up. So they shall sit in our lock box until we cash them. It's causing a pain in the ass because that investment is outside our trust and will create probate situation for our beneficiaries if we die. We will go over our income level for ACA if we cash them. Between a rock and a hard place.


BTW I really like your quote.

I know it’s pain in the back. But that’s what has to be done sooner or later.
Make copies of bonds, mail by certified mail, it may take awhile before they convert, may take several calls, but that’s what it takes...

Good luck

 

[misshathaway]

I know it’s pain in the back. But that’s what has to be done sooner or later.
Make copies of bonds, mail by certified mail, it may take awhile before they convert, may take several calls, but that’s what it takes...

Good luck

I did exactly the above a few years ago. Nothing bad happened except some agita. So nice to be able to see all of the previously paper and electronic purchases in one place.