How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lane Your Own Question
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10099
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
1929974
Type Your Tax Question Here...
Lane is online now
A new question is answered every 9 seconds

I"m cashing HH bonds. If deferred interest is donated to a

This answer was rated:

I"m cashing HH bonds. If deferred interest is donated to a non-profit, is there a tax break?

Lane :

Hi,

Lane :

Yes, as long as the donation is to a qualified charity, the deduction FROM taxable income, would offset the, Addition TO taxable income that the interest creates

Lane :

Have you already cashed in the bonds or actually received any interest (and the 1099 int than comes from it?)

Lane :

While waiting for your response, I'll try to provide some helpful info on H series bonds, generally:

Lane :

With an HH Bond, you may be postponing (deferring) interest that an earlier bond earned.

Lane :

You may wait to include the deferred interest on your Federal income tax return until you are filing your return for the year in which the first of these events occurs:



  • You cash in (redeem) the HH Bond.

  • The HH Bond stops earning interest.

  • The HH Bond is reissued to show a change in ownership that is a taxable event.

Lane :

From Treasury Direct:

Lane :

How do I know if my HH Bond has deferred interest?


The amount of the deferred interest is included in the face amount of the HH Bond and is shown in a tax-deferral legend on the front of the bond.


If the exchange included more than one HH Bond, the amount of the deferred interest was divided proportionately among the HH Bonds.

Lane and other Tax Specialists are ready to help you

Thanks Wanda.

I just wanted you to see this:


Finally, remember that, as we see above here, an actual change of ownership of the bonds (such as trying to give or donate the bonds themselves) can trigger the tax ... HOWEVER, as I first mentioned, the tax deduction that you make to the non-profit (as you mentioned) CAN generate a tax deduction that would offset the interest income that came FROM the bonds


Here's an excellent article: http://www.pgdc.com/pgdc/transferring-us-savings-bonds-charities

Thanks again,
Lane