Comments on: Who pays the taxes

by: Tom Adams

Wed, 26 May 2010 13:57:09 +0000

Cory - If you cash the bonds this year, you will receive a 1099-INT in the mail by the end of January 2011 and you may have to file a tax return for 2010 by April 15, 2011.

Whether you have to file or not depends on how much interest you've earned and on how much other income you have. You may be over the amount for filing but still not have the pay anything. All the rules are on www.irs.gov.

Tom Adams

by: Cory

Wed, 26 May 2010 06:40:06 +0000

Okay so i have three savings bonds worth a total of $1,033.96, a 500 bond, a 200, and a 100. im wondering if i cash them all at once who will get taxed? My name is the owner on two of the bonds and im the co-owner on the 500 bond. Will i be taxed for these if i cash them? and if so how do i go about doing the taxes since im only 18. Will the 1099-INT be mailed to me?
Thanks for your help, Cory

by: Tom Adams

Mon, 24 May 2010 14:35:13 +0000

Vicki - the article at the top of this page answers your question, I believe. I'm sorry the answer is murky, but it is what it is. The Savings Bonds process allows things that the IRS doesn't agree with.

In any case, if you have your own TreasuryDirect account, you'd only be able to transfer bonds with your name listed first into it.

Tom Adams

by: Vicki

Mon, 24 May 2010 13:46:26 +0000

Hello Tom,

I am 24, and my parents had purchased around $8000 (current value) of bonds for me over the 1990s. Some of the bonds (maybe half) have my father as the sole owner and me as the beneficiary (POD). Also, some of these bonds are earning really, really low interest rates, and I'm interested in redeeming them and investing the money into a higher return bond fund.

My parents would like to avoid paying taxes on these bonds. Can my father add me as a co-owner to these bonds, then if I redeem them, I could have the tax liability on my SSN?

Of note, I was planning on creating a TreasuryDirect account and exchanging the better yielding bonds into that. If this process would be easier in putting all of the bonds into a TreasuryDirect account first, I would go that route.

Thanks for your help!

by: Tom Adams

Mon, 26 Apr 2010 15:56:11 +0000

Kevin - It is inevitable and the sooner it's done and over with the better.

Tom Adams

by: Kevin

Sun, 25 Apr 2010 23:30:44 +0000

Tom:

My grandmother owns numerous E and EE bonds (some that have already passed the 30 year maturity date). All of the bonds are held in her trust and now, since she is basically giving the government a "free loan" she is wishing to cash in and gift them to my mother, brother, and myself. She is however, leary of having to pay income tax on any interest earned, but from what I have been reading, this is inevitable. Please advise.