Gifting Exisiting Government Bonds

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Rob54keep
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Joined: Mon Dec 01, 2008 9:06 pm

Gifting Exisiting Government Bonds

Post by Rob54keep »

My mother-in-law has some 30 year government bonds that are beyond their 30 year period. She doesn't want to cash them in because it would affect her eligibility to live in the apartments in which she resides (they are large denomination bonds). Can she somehow gift these to her son (who is a very low marginal tax bracket) and have him cash them in?
dbr
Posts: 46181
Joined: Sun Mar 04, 2007 8:50 am

Re: Gifting Exisiting Government Bonds

Post by dbr »

This may be of some help concerning EE bonds:

http://finance.zacks.com/transferring-l ... -5673.html

The article appears to say that there is a tax consequence to the original owner which would appear to be what you want to avoid, and if that 1099 is income that affects eligibility, you wanted to avoid that as well.

Here is a better article in the issue:

http://www.treasurydirect.gov/indiv/res ... r.htm#when

One question is that if these were I or EE bonds and have exceeded the thirty year term taxes should have already been paid at that point and would not now appear as income.
placeholder
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Joined: Tue Aug 06, 2013 12:43 pm

Re: Gifting Exisiting Government Bonds

Post by placeholder »

If these are savings bonds then indeed the tax should have been paid at final maturity but if it wasn't then the 1099 generated when cashed will be in the year they are cashed but the OP needs to clarify what sort of bonds these are.
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