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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16544
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I HAVE ABOUT 65000.00 WORTH OF EE US SAVINGS BONDS THE WILL

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I HAVE ABOUT 65000.00 WORTH OF EE US SAVINGS BONDS THE WILL MATURE IN 2014. THE IS ABOUT $45000.00 INTEREST. IS THERE ANYWAY I CAN AVOID THE INTEREST. I AM THINKING OF GIFTING THEM TO MY BROTHER`S GRANDDAUGHTER FOR THEIR CHILDREN`S EDUCATION. GOT ANY SU7GGESTIONS THANK YOU
MyVirtualCPA :

Thank you for your question, and thanks for using JustAnswer.com

MyVirtualCPA :

How are you today?

MyVirtualCPA :

You could gift the bonds to your Brother's Granddaughter, but in the end she would be the one to pay the tax on the interest

MyVirtualCPA :

There's no way to avoid paying tax on the interest altogether - someone will have to pay it.

MyVirtualCPA :

If your goal is to avoid tax at your level, gifting the bonds would work

MyVirtualCPA :

However, the person you gift them to would have the tax burden.

MyVirtualCPA :

I have done some further research.

MyVirtualCPA :

If you gift the savings bonds to someone else, you will first have to pay taxes on the interest that has accrued.

MyVirtualCPA :

You cannot gift the savings bonds to shift it where the interest would be exempt due to qualified educational expenses

MyVirtualCPA :

I'm truly sorry for the confusion, and sorry if the answer is not what you had hoped.

MyVirtualCPA :

Do you have any further questions?

Customer :

I AM 89 YEARS OLD I WILL NOT PAY ANY MORE MONEY THAN THE $ 30 I AGREED TO. I APPRECIATE THE ANSWER BUT I

MyVirtualCPA :

I do not show that you subscribed, so the $30 you were charged is all that you will have to pay.

Customer :

WILL NOT ENGAGE YOU FOR ANY OTHER QUESTION. ALTHOUGH I WANTED TO ASK WHAT ARE THE RAMIFICATIONS

Customer :

IN GIFTING THE 66000.00?

MyVirtualCPA :

If you gift the $66,000 you would have to pay tax on the accrued interest first.

Customer :

I AM A LIVING TRUST, I WANT TO GIFT IT BEFORE I DIE JUST TAKE OUT OF MY ESTATE. I PLAN TTO PAY THE TAX MYSELF IN 2013. THANK I WAS AFRAID I WAS BEING SCAMMED.

MyVirtualCPA :

No, you are not being scammed

MyVirtualCPA :

IS there anything else I can assist you with today?

Customer :

I APOLOGIZE TO YOU , SINCERELY, JHE

MyVirtualCPA :

It was a pleasure working with you today. If you could, use the rating feature along the bottom of your screen to rate my response "excellent" - this will ensure that I receive credit for assisting you today

Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16544
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Megan C and 3 other Finance Specialists are ready to help you
Customer: replied 4 months ago.
The system shows you requested a new expert on a question you asked in 2013. Did you need Customer Support?
Hi, I am a different expert and can help here...You have hit on one of the only tow real options for avoiding the tax (other than having bought them through a Roth IRA)...EDUCATION:...If you plan to use the bonds for your child’s college costs, the Treasury instructs that you buy them in your name or jointly with your spouse and make the child the beneficiary....Also you mist have been 24 years of old before purchasing the bonds...You must incur the education expenses for tax purposes in the same year that you redeem the bonds. The exclusion covers tuition and fees but not room, board or books...The purpose of this program is to benefit the taxpayer(s) paying for qualified educational expenses of the taxpayer, taxpayer's spouse, or taxpayer's dependent within the meaning of Section 151 of the Internal Revenue Code. So again, to exclude the bond interest from gross income, the bond must be in the name of the taxpayer, or in the name of the taxpayer and the taxpayer's spouse, and not in the name of the dependent. ...Donations...If you donate the proceeds of your savings bonds to a tax-exempt charity in the year of redemption, the tax deduction will offset the tax on the bond interest.... ...let me know if you have questions
Hi, I am a different expert and can help here...You have hit on one of the only tow real options for avoiding the tax (other than having bought them through a Roth IRA)...EDUCATION:...If you plan to use the bonds for your child’s college costs, the Treasury instructs that you buy them in your name or jointly with your spouse and make the child the beneficiary....Also you mist have been 24 years of old before purchasing the bonds...You must incur the education expenses for tax purposes in the same year that you redeem the bonds. The exclusion covers tuition and fees but not room, board or books...The purpose of this program is to benefit the taxpayer(s) paying for qualified educational expenses of the taxpayer, taxpayer's spouse, or taxpayer's dependent within the meaning of Section 151 of the Internal Revenue Code. So again, to exclude the bond interest from gross income, the bond must be in the name of the taxpayer, or in the name of the taxpayer and the taxpayer's spouse, and not in the name of the dependent....Donations...If you donate the proceeds of your savings bonds to a tax-exempt charity in the year of redemption, the tax deduction will offset the tax on the bond interest.... ...let me know if you have questions