I Bonds
Terry – my wife and I have a number of jointly-owned I bonds which we have accumulated over the last 18 years. I have tried to find out if ownership of the bonds can be transferred tax-free to our grandchildren (who are not minors) but the answer from treasurydirect.gov seems to be that any transfer of the bonds to a different owner triggers taxability of the earned interest to myself and my wife. Does that sound correct to you or can you suggest a source which might give me a definitive answer? Thanks.
Terry Says
That is correct. I suggest you hold them to maturity, cash them in, and pay the taxes. But don’t cash them in early, because if you’ve owned them that long they have a nice, high “floor” rate.
And if you want to do soemthing for your grandchildren who are young, contribute to a 529 College Savings Plan for them. Ask their parents if they have opened such an account. If not, learn more at www.SavingforCollege.com.
