Comments on: Who pays the tax on inherited Savings Bonds - estate or heirs? http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/ Thu, 18 Mar 2010 15:26:23 +0000 http://wordpress.org/?v=2.0.4 by: Tom Adams http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/#comment-47051 Thu, 03 Sep 2009 15:17:11 +0000 http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/#comment-47051 Tim - you have two issues, estate tax and income tax. And you have those issues on the federal and state level. On estate taxes, typically state-level taxes are a bigger deal than federal taxes, but your mother's estate is approaching the size where federal tax could also be owed. On income taxes, Savings Bonds are free of state income tax if you fill out the state tax forms correctly. But the federal tax will be significant. Stepped-up basis applies to things that have capital gains. Savings Bonds don't have capital gains - just interest earned - so there's no stepped-up basis. There's no way to get out of paying the federal income tax, but there are ways to minimize it. It would pay you to spend a weekend reading <a href="http://www.amazon.com/dp/0976064537?tag=alert-20" rel="nofollow">my book</a>; the issues are too complicated to explain here. Tom Adams Tim - you have two issues, estate tax and income tax. And you have those issues on the federal and state level.

On estate taxes, typically state-level taxes are a bigger deal than federal taxes, but your mother's estate is approaching the size where federal tax could also be owed.

On income taxes, Savings Bonds are free of state income tax if you fill out the state tax forms correctly. But the federal tax will be significant. Stepped-up basis applies to things that have capital gains. Savings Bonds don't have capital gains - just interest earned - so there's no stepped-up basis.

There's no way to get out of paying the federal income tax, but there are ways to minimize it. It would pay you to spend a weekend reading my book; the issues are too complicated to explain here.

Tom Adams

]]> by: Tim http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/#comment-47045 Thu, 03 Sep 2009 14:41:46 +0000 http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/#comment-47045 Tom, My mother has $850,000 of hh bonds. Will her estate need to pay estate taxeson these if her total estate is over the exemption? Will they get a step up in basis? If not can I avoid the income tax at her death by puting them in my name? At death? or now? Tom, My mother has $850,000 of hh bonds. Will her estate need to pay estate taxeson these if her total estate is over the exemption? Will they get a step up in basis? If not can I avoid the income tax at her death by puting them in my name? At death? or now?

]]> by: Tom Adams http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/#comment-45680 Wed, 05 Aug 2009 14:36:27 +0000 http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/#comment-45680 CJ - assuming the submitted forms were the correct forms and were filled out correctly with all required signatures and supporting documentation (death certificates, probate court documents, etc.) then it takes about three weeks. Often there are problems with the submission, however, and in those cases it will take longer. How much longer depends primarily on how fast the submitting party responds to the Treasury's requests for corrected information. Tom Adams CJ - assuming the submitted forms were the correct forms and were filled out correctly with all required signatures and supporting documentation (death certificates, probate court documents, etc.) then it takes about three weeks.

Often there are problems with the submission, however, and in those cases it will take longer. How much longer depends primarily on how fast the submitting party responds to the Treasury's requests for corrected information.

Tom Adams

]]> by: CJ Allred http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/#comment-45650 Tue, 04 Aug 2009 18:33:21 +0000 http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/#comment-45650 Once the heirs submit all series E bonds to the bank with all required forms; howe long does it take for the treasury dept to remit payment on the bonds? Once the heirs submit all series E bonds to the bank with all required forms; howe long does it take for the treasury dept to remit payment on the bonds?

]]> by: Tom Adams http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/#comment-38813 Fri, 10 Apr 2009 14:07:00 +0000 http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/#comment-38813 Pat - see <a href="http://www.savings-bond-advisor.com/how-do-you-change-the-bank-account-for-series-hh-interest-payments/" rel="nofollow">this</a> and <a href="http://www.savings-bond-advisor.com/changing-the-ssn-for-hh-bond-interest/" rel="nofollow">this</a>. Tom Adams Pat - see this and this.

Tom Adams

]]> by: Pat http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/#comment-38811 Fri, 10 Apr 2009 13:19:41 +0000 http://www.savings-bond-advisor.com/who-pays-tax-on-inherited-savings-bonds/#comment-38811 The bank account that the interest for HHH series bonds was being paid to was inadvertently closed. What happens to the interest? Can a new account be assigned? Can the social security number be changed to the beneficiarie's number since the joint owner has passed away? The bank account that the interest for HHH series bonds was being paid to was inadvertently closed. What happens to the interest? Can a new account be assigned? Can the social security number be changed to the beneficiarie's number since the joint owner has passed away?

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