iBond gifts

[jpohio]

In 2009, 10 and 11 I purchased ibonds at Treasury Direct as gifts for two of my nephew's children. Despite numerous requests he refuses to set up accounts for either of them. I have no idea why. As a result, the ibonds are sitting in my gift box. I am unable to transfer them since the kids do not have accounts at Treasury Direct.

I would like to take the gifts back and use the funds to either buy gift ibonds for someone else or me and my wife. I do not see any option like that on the TD website and am afraid the money/ibonds will sit in the gift box forever.

Do I have any options other than to continue to ask my nephew to set up accounts at TD?

Thanks.

[epoche]

Once gifted, the gift is irrevocable. The person with the SSN registered to the bond is the owner.
Once old enough, you could encourage them to set up their own accounts if the nephew hasn't done it by then.
If they haven't been delivered by the time the bonds mature (30 years after purchase, so 2039-2041), you'd likely have to contact TreasuryDirect to determine how to proceed.
In the meantime, they are just earning interest and growing over time, which is presumably what you intended.

[bombcar]

They're owned by the giftee, and at 18, if not before then, they'll be able to claim them on their own.

[legalwriter1]

If the nephew refuses to cooperate, one option is to contact the mother of the children. I believe only one parent is needed to create a TD account for a minor child. If the nephew or mother refuse to cooperate, another option is to wait until the children turn age 18. The donor could then contact the donee children directly to create their own accounts at TD. At that point, donor can deliver the gifts. As others indicated, the gift is irrevocable (no "take backs"). The bonds continue to earn interest.

The owner will pay the taxes when the bonds are redeemed. If they wait the full 30 years, there might be a sizeable tax bill. If the children redeem the bonds (or do partial redemptions), the parents could do some tax gain harvesting if income is under the kiddie tax limit to avoid paying federal income taxes. The parents could then use the money to contribute to 529s, and possibly get a state income tax credit for 529 contributions. If the children redeem at 18 or 19, they might be at a low income tax bracket.

If someone gifted I-bonds for my children, I would jump at the chance to create an account for the donor to deliver the gifts for my children.

[Makefile]

As others mentioned, the SSN of the bond owner has to be specified at the time of gift bond purchase, but the recipient's account number isn't input until the time of delivery, so worst case scenario is wait until the recipient turns 18 and can open their own TreasuryDirect account.

Gift bonds or not, notating one's TreasuryDirect account number seems like something that belongs in one's "final letter" in case they die still owning bonds there.