united states saving bonds
I have bonds that are due to mature and I was wondering if there was a way to convert these bonds to accounts for my grandchildren college funds? I obviously don’t want to pay taxes if I could avoid it and would like to put the whole thing into college funds.
Terry Says
Nope — you must pay all the accumulated taxes at YOUR marginal rate, and then you can put any amount into a 529 College Savings Plan (up to 5 years of the annual $15,000 maximum gift tax, that is!).
Now if the parents had owned the bonds, purchased after 1989, there is an exemption if the proceeds are cashed in the same year tuition is paid, and that applies to “middle income” families.
