Niece needs money for college

[kaneohe]

I suspect this won't work but perhaps it might be worth a try anyways to find out how well the computers are programmed. Suppose OP adds niece as co-owner. I think, based on this Individual - Series EE/E Savings Bonds Tax Considerations
that this is not a taxable event. Later niece cashes bond at bank. In principle, principal co-owner (OP) is responsible for interest but I wonder what computer will do since niece is cashing it.......does she give her SSN and does computer get confused by that or not? The worst that will happen is that 1099 goes to OP but perhaps it might go to niece.

[Martha]

Good find kaneohe. Reading the link I wondered if the niece could be listed as "principal co-owner" as that is the person responsible for tax reporting. But the definition of principal co-owner is:

Principal Co-owner

The principal co-owner is the co-owner whose funds were used to purchase the savings bonds or who received the bonds as a gift, as an inheritance, or through court proceedings and had the bonds reissued to add another person as co-owner without receiving any contribution from that other person.

Individual - Glossary of Terms

So it looks doubtful to me that this strategy will work.

[Milton]

Quote:

Originally Posted by Martha I wondered if the niece could be listed as "principal co-owner" as that is the person responsible for tax reporting.

I have the impression that the principal amount is relatively modest and the taxes will be accordingly limited; if so, I would suggest just paying the tax and gifting the balance to the niece. It doesn't make much sense to get 'cute' in the hope of evading a small amount of tax.

If I am wrong and the amounts at stake are actually substantial, I recommend seeking professional guidance rather than relying upon free advice on this forum.

[Martha]

Milton, you took my post out of context. I specifically doubted that the strategy would work. I feel like what I said was misrepresented.

Regarding your statement about free advice, our rules say don't rely on what people say here. To reinforce this, I and others often refer to their disclaimer signature lines. In this thread alone I referred to mine twice.

<sigh>

[Bimmerbill]

She can't join the National Guard? They paid for some of my B.S. and 80% of my MBA. The new GI Bill is pretty nice.

[Milton]

Quote:

Originally Posted by Martha I specifically doubted that the strategy would work.

Yes you did.

Quote:

Originally Posted by Martha I feel like what I said was misrepresented.

I am sorry for the hurt feelings. I didn't intend to misrepresent anything, and your post speaks for itself.

My post was intended to assist the op, rather than attack you (or anyone else who is trying to help). In hindsight, I should not have quoted part of your post (intended only to give my post some context, but not really necessary in the circumstances).

<sigh>