savings

Cash in family's bonds? They're not yours

Don TaylorQuestionDear Dr. Don,
I purchased some Series E bonds using my Social Security number, but they were issued to my daughter and grandson. Would I have a problem cashing them in as I will have to report the interest to the IRS?
-- Orlando Obviate

AnswerDear Orlando,
Since the Treasury stopped issuing Series E savings bonds in June 1980, it's more likely you're talking about Series EE savings bonds. If you are talking about Series E bonds, then by all means they should be cashed in because they stopped earning interest once they reached final maturity.

Why would you be cashing in your daughter's and grandson's bonds? They're not yours. Here's what the TreasuryDirect website has to say on the topic on its Web page on buying EE savings bonds:

Identifying Information
Your Social Security number (SSN) is needed to buy a bond. The bond owner will be asked to provide his or her Social Security number for tax purposes when they cash the bond. But, if you're buying a gift and don't know the person's number, you can use your own. Using your SSN doesn't mean you will have a tax liability when the bond is cashed. The bond owner will be asked to provide his or her Social Security number for tax purposes when they cash the bond.

So you don't face the tax liability. I'd suggest that your family members track the value of their savings bonds using TreasuryDirect's savings bond calculator or its Savings Bond Wizard program.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

Ask the adviser

To ask a question of Dr. Don, go to the "Ask the Experts" page and select one of these topics: "Financing a home," "Saving & Investing" or "Money." Read more Dr. Don columns for additional personal finance advice.
 

Bankrate's content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate's Terms of Use.

News alert Create a news alert for "savings"

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

Ask Dr. Don

Quickest path toward $1 million?

Dear Dr. Don, This question involves how best to make for a better life for my family. How can I make a one-time investment of $5,000 grow into $1 million or more over 60 years? One of my broader goals is to encourage my... Read more

advertisement
Partner Center
advertisement

Connect with us