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Pay for Grandsons college tuition with Ibonds

Posted: Sun Feb 10, 2019 2:46 pm
by hoops777
I am a bit confused after researching this topic.We have some Ibonds purchased in 2001 that are yielding over 5%.They will mature right before our grandson starts college.They are in our name.We can cash those in and they will be tax free if used for our grandson’s college,correct?We do not need to have them registered in his name or do anything else besides fill out the tax form?

Re: Pay for Grandsons college tuition with Ibonds

Posted: Sun Feb 10, 2019 2:52 pm
by livesoft
Doesn't work for grandson. It has to be one of your dependents or your spouse. Also there are income limits for folks who do have a child with college education expenses.

See Form 8815.

Re: Pay for Grandsons college tuition with Ibonds

Posted: Sun Feb 10, 2019 2:54 pm
by Jack FFR1846
Sorry. The tax breaks are only for parents when used for kids college with some income restrictions and other restrictions on their age when bought, how they're titled (parent(s) names ok, kid's name not ok).

Grandparents don't get a tax break.

https://www.foxnews.com/story/saving-th ... -grandkids
is clear on this.

https://www.treasurydirect.gov/indiv/pl ... cation.htm
treasury direct. Not crystal clear, but only says "parents".

Re: Pay for Grandsons college tuition with Ibonds

Posted: Sun Feb 10, 2019 3:05 pm
by hoops777
Oh well....it was a good try.Thanks for the answers.

Re: Pay for Grandsons college tuition with Ibonds

Posted: Sun Feb 10, 2019 3:15 pm
by hoops777
Jack FFR1846 wrote:
Sun Feb 10, 2019 2:54 pm
Sorry. The tax breaks are only for parents when used for kids college with some income restrictions and other restrictions on their age when bought, how they're titled (parent(s) names ok, kid's name not ok).

Grandparents don't get a tax break.

https://www.foxnews.com/story/saving-th ... -grandkids
is clear on this.

https://www.treasurydirect.gov/indiv/pl ... cation.htm
treasury direct. Not crystal clear, but only says "parents".
I just read the article from fox and it had a clever way to get around paying the tax by using a 529 initially set up in my name and then changing it to my grandsons.Probably not worth the hassle and by then I will be 81 and probably more confused than I am now :D

Re: Pay for Grandsons college tuition with Ibonds

Posted: Sun Feb 10, 2019 3:24 pm
by HomeStretch
hoops777 wrote:
Sun Feb 10, 2019 3:15 pm

I just read the article from fox and it had a clever way to get around paying the tax by using a 529 initially set up in my name and then changing it to my grandsons.Probably not worth the hassle and by then I will be 81 and probably more confused than I am now :D
Below is a link to a BH thread discussing this. I thought it was clever too and bookmarked the link.

viewtopic.php?t=258148

Re: Pay for Grandsons college tuition with Ibonds

Posted: Sun Feb 10, 2019 3:42 pm
by hoops777
Thanks