US Savings Bonds

Posts Tagged ‘bonds’

Question: should our daughter cash in her Savings Bonds?

my daughter has several Savings Bonds given to her over a period of 10 years. She is now 17 and going to college next year. Should she
deposit her Savings Bonds in her college account now or continue to save them?

Answer: hold off until she needs the $, the bonds will continue to grow in interest

928 Who made money during the great depression? Part 1

Question: Savings Bonds: What is the difference between EE bonds and I Bonds?

I have purchased both I Bonds and EE bonds in the past, and it seems like the interest rate on I Bonds is much better. Why is that?

Answer: I Bonds are a better choice because they are adjusted twice per year for inflation. In the simplest terms, the interest rate will be much better that the EE bonds. The EE bond now are at a fixed rate which means that the life of the bond will be at whatever rate in which you brought it. It wasn’t like that in the past for EE bond. That change was recently made. I Bonds can be redeemed in 5 years without forfeiting any of the interest. If you redeem sooner, you will loose three months worth of interest. With both bond, you are only taxed on the federal level, not state. You can also be tax exempt for both bond if you use them for qualified educational expenses.

Treasury Direct is an excellent website for learning about and purchasing these bonds.

Peter Schiff: The Crisis Starts Now!

Question: my mom died leaving no money to pay taxes. will the irs come after my sister and myself?

before she died she cashed in a bunch of EE Savings Bonds and gave the proceeds away without leaving anything for taxes.

Answer: You have my condolences on your loss.

The complete and accurate answer depends on the definition of a “bunch.” The important factor is how much of the bunch was income. It used to be easy to figure out how much of the proceeds from cashing in US Savings Bonds, but the US Treasury has made things a little more difficult. http://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds.htm

I’m guessing from your question that your mother was single. If that assumption is correct, then she could have income of $9,350 in either 2009 or 2010 without incurring an income tax liability.

If she cashed in $100,000 of bonds, and the income portion was $35,000, then there may be a problem. Even though she didn’t have any money when she died, did she have a will? The IRS would likely start with the person named as the executor and trace the money to the recipients.

I hope this helps.
Gary

The New Three-Legged Stool