Comments on: Who pays the taxes http://www.savings-bond-advisor.com/who-pays-the-taxes/ Wed, 17 Mar 2010 05:39:11 +0000 http://wordpress.org/?v=2.0.4 by: Tom Adams http://www.savings-bond-advisor.com/who-pays-the-taxes/#comment-63297 Tue, 16 Mar 2010 19:02:35 +0000 http://www.savings-bond-advisor.com/who-pays-the-taxes/#comment-63297 Nancy - yes, your son will receive the 1099-INT tax form reporting the interest to the IRS and he is responsible for the taxes. He should have held some money back to pay them and given you the rest. Now he has nothing to pay the tax with. Tom Adams Nancy - yes, your son will receive the 1099-INT tax form reporting the interest to the IRS and he is responsible for the taxes. He should have held some money back to pay them and given you the rest. Now he has nothing to pay the tax with.

Tom Adams

]]> by: Nancy http://www.savings-bond-advisor.com/who-pays-the-taxes/#comment-62360 Thu, 11 Mar 2010 19:18:04 +0000 http://www.savings-bond-advisor.com/who-pays-the-taxes/#comment-62360 My husband owned EE bonds as co-owner with my son. My husband died in 2003. I understand that my son is now sole owner. He cashed the bonds in 2009 and paid me for a student loan for the education he has received. Is he still responsible for the interest on the bonds? My husband owned EE bonds as co-owner with my son. My husband died in 2003. I understand that my son is now sole owner. He cashed the bonds in 2009 and paid me for a student loan for the education he has received. Is he still responsible for the interest on the bonds?

]]> by: Ruth Henry http://www.savings-bond-advisor.com/who-pays-the-taxes/#comment-59761 Wed, 24 Feb 2010 16:36:29 +0000 http://www.savings-bond-advisor.com/who-pays-the-taxes/#comment-59761 Dear Tom, I have read your book and it is excellent. I am wanting to make sure I understand the process, as my accountant was not familiar with the process. On the POD I Bonds that I have already cashed, I would report the interest on my tax return--Schedule B--and indicate Nominee Distribution-- reporting my mother's Social Security number--[backing out the interest from the total] and at the same time report the interest earned to the date of her death on her final tax return. If we decided to keep the other I bonds, then I could re-register them, and also pay the interest earned to date of death on her final tax return now.[being sure to keep the record of this and provide that to the new registrant to avoid double tax.] If this is right, then I will discuss this process with my accountant. Thank you. Dear Tom,
I have read your book and it is excellent. I am wanting to make sure I understand the process, as my accountant was not familiar with the process. On the POD I Bonds that I have already cashed, I would report the interest on my tax return–Schedule B–and indicate Nominee Distribution– reporting my mother's Social Security number–[backing out the interest from the total] and at the same time report the interest earned to the date of her death on her final tax return.

If we decided to keep the other I bonds, then I could re-register them, and also pay the interest earned to date of death on her final tax return now.[being sure to keep the record of this and provide that to the new registrant to avoid double tax.]

If this is right, then I will discuss this process with my accountant. Thank you.

]]> by: Tom Adams http://www.savings-bond-advisor.com/who-pays-the-taxes/#comment-59698 Tue, 23 Feb 2010 15:52:17 +0000 http://www.savings-bond-advisor.com/who-pays-the-taxes/#comment-59698 Ruth - What you want to do is technically possible, but the process is fairly complex. I cover it in <a href="http://www.amazon.com/dp/0976064537?tag=alert-20" rel="nofollow">my book</a>. Older I bonds are one of the best investments available today - the book will also help you decide if cashing the bonds is really in your best interest. Tom Adams Ruth - What you want to do is technically possible, but the process is fairly complex. I cover it in my book. Older I bonds are one of the best investments available today - the book will also help you decide if cashing the bonds is really in your best interest.

Tom Adams

]]> by: Ruth Henry http://www.savings-bond-advisor.com/who-pays-the-taxes/#comment-59607 Tue, 23 Feb 2010 04:28:26 +0000 http://www.savings-bond-advisor.com/who-pays-the-taxes/#comment-59607 My mother died March 2009. I am the Personal Representative for the estate. She has about $60,000 in Series I Bonds [no beneficiaries or co-owners listed on the Bonds themselves]. Her will is in Probate now. I would like to cash the bonds and have the estate pay the taxes on the interest earned to the date of her death. How would I accomplish this? When I redeem the bonds will I have them payable to the Estate, and her Tax ID? Two other I Bonds were POD to me. Can I have the taxes on the interest earned on those also paid by the estate [up to the date of death] even though a 1099 came to my Social Security number? I have not yet filed her 2009 Income Taxes. My mother died March 2009. I am the Personal Representative for the estate. She has about $60,000 in Series I Bonds [no beneficiaries or co-owners listed on the Bonds themselves]. Her will is in Probate now. I would like to cash the bonds and have the estate pay the taxes on the interest earned to the date of her death. How would I accomplish this? When I redeem the bonds will I have them payable to the Estate, and her Tax ID? Two other I Bonds were POD to me. Can I have the taxes on the interest earned on those also paid by the estate [up to the date of death] even though a 1099 came to my Social Security number? I have not yet filed her 2009 Income Taxes.

]]> by: Tom Adams http://www.savings-bond-advisor.com/who-pays-the-taxes/#comment-59518 Mon, 22 Feb 2010 15:21:55 +0000 http://www.savings-bond-advisor.com/who-pays-the-taxes/#comment-59518 Juanita - This is a much more complicated question than it appears because the answer depends on a lot of things you don't mention. Let's start with your two younger daughters who are going to college. You may qualify for the <a href="http://www.savings-bond-advisor.com/the-fine-print-of-the-us-savings-bond-college-education-deduction/" rel="nofollow" rel="nofollow">Savings Bond college education deduction</a> on those bonds if you or your husband are the owner and neither child is a co-owner. But if the bonds have the children's names on them as owner or co-owner, as you suggest, then that deduction isn't available. On the other hand, assuming they don't have any other income in college, the taxes on cashing the bonds will be zero or close to it. But you didn't ask about them, you asked about your older daughter's bonds. The odds are there would be no significant reduction in taxes if she did anything. If the total value of the bonds is less than $10,000, I'd suggest you keep them in her name for now. If it's more than that, you should spend a weekend reading <a href="http://www.amazon.com/dp/0976064537?tag=alert-20" rel="nofollow">my book</a>, because, as I said earlier, this is complicated. Tom Adams Juanita - This is a much more complicated question than it appears because the answer depends on a lot of things you don't mention.

Let's start with your two younger daughters who are going to college. You may qualify for the Savings Bond college education deduction on those bonds if you or your husband are the owner and neither child is a co-owner.

But if the bonds have the children's names on them as owner or co-owner, as you suggest, then that deduction isn't available. On the other hand, assuming they don't have any other income in college, the taxes on cashing the bonds will be zero or close to it.

But you didn't ask about them, you asked about your older daughter's bonds. The odds are there would be no significant reduction in taxes if she did anything. If the total value of the bonds is less than $10,000, I'd suggest you keep them in her name for now. If it's more than that, you should spend a weekend reading my book, because, as I said earlier, this is complicated.

Tom Adams

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