"Alan Yasutovich" <yasu[at]ncounty.net> wrote:

- quote -

Yes. I believe the treasury department has a section which
can tell you how much the bonds are worth based on serial
numbers.

- quote -

If the estate and lifetime gifts are only $500k, there is no
estate tax. Income tax will be whatever the estate's
marginal rate is times the interest.

As to converting them, IIRC you cannot transfer registration
on savings bonds, you must cash them out.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Alan Yasutovich wrote:

- quote -

My condolences on the death of your parents.

- quote -

Total taxable interest is that amount. In the case of E or
EE bonds converted to H or HH bonds, only the interest
before conversion is deferred. To whom it is taxable is
another matter.


- quote -

I would have to research the matter to determine if the E
and EE bonds are taxable on death, or can be treated as
such. I believe that to be the case, so that the interest
before death would be taxed on your parents' final tax
return. (I noticed above that you said death of your
parents. Did they both die at the same time, or is this
just the most recent parent to die. The answer might make a
difference under some circumstances.) Only interest
received by the estate would be taxable by the estate's
income tax.

If this is the case, then the estate's $600 exemption, plus
expenses of administering the estate, are likely to cover
the interest, so that no income tax is due from the estate.
However, an estate income tax return (form 1041) probably
needs to be filed. As this almost certainly requires a
professional, I decline to give further detailed advice.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Alan Yasutovich" <yasu[at]ncounty.net> wrote:

- quote -

http://www.irs.gov/faqs/faq-kw191.html

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Hello,

Upon the death of my parents I find that I have some savings
bond in the estate. E, EE, and HH.

The question really has two parts.

1) What part of the bond amounts is taxable? The HH bonds
have been yeilding interest. Since they were converted from
E or EE with no interest taxed..........

Is the taxable amount the amount the amount of value above
purchase price for all type of bonds?

2) The bonds are in my parents name and are part of the
"estate". The estate is less than $500K and I think that
the bond interest is the only taxable amount. Theoretically
the estate tax will be paying it. (We have an estate tax
number). How much is the estate tax vs if we convert them to
my name and I pay the tax?

Any help will be appreciated.

Thanks

Alan

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->