ibonds and Gift Tax

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rouble
Posts: 4
Joined: Thu Feb 27, 2020 1:53 pm

ibonds and Gift Tax

Post by rouble »

A married couple can give a gift of US$36,000 for tax year 2024 (without filing form 709). Further, we can buy ibonds for a child of up to US$10,000 per year. Putting two and two together...

Lets say, a married couple funds their (under 18 year old) kid's 529 to the max gift allowed, in 2024, i.e. US$36,000. Can they still gift the child an ibond of US$10,000 in 2024 in a gift box, to be distributed in a future tax year - without filing form 709?

I have seen threads on this before - but nothing conclusive:
viewtopic.php?t=436313
viewtopic.php?t=392114
Last edited by rouble on Wed Oct 30, 2024 12:40 pm, edited 1 time in total.
lakpr
Posts: 12527
Joined: Fri Mar 18, 2011 9:59 am

Re: ibonds and Gift Tax

Post by lakpr »

You will just have to file Form 709, assuming you will be delivering the gift to the child's Treasury Direct account this year. If you do NOT want to file Form 709, then you are already at the limit of $36,000 (529 contributions are deemed gifts to the minor).

Not a tax lawyer, just my interpretation of the rules.
fabdog
Posts: 2641
Joined: Wed Jan 16, 2013 12:59 pm
Location: Williamsburg VA

Re: ibonds and Gift Tax

Post by fabdog »

the nothing conclusive was differences of opinions about Ibonds bought using the Gift Box feature and delivered in a future year. I can see the arguments both ways

But in the example you laid out, where you have contributed the max to 529, and buying them $10K IBond in their account, yes, you will need to file a 709 form. No tax will be due, and you and your spouse (assuming you elect gift splitting) will have $5 taken from your estate tax exemptions

Mike
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