Series E Savings Bond Question

I have approximately 30 individual Series E (yes - E, not EE) US Savings
Bonds which will reach full maturity (30 years) in a few years. (These
are bonds in my name that I bought myself through payroll deductions).

I would rather not cash them in (and get hit with a large tax bill), if
I can help it. But, from what I understand, they will no longer earn
interest after they mature. I would prefer to apply them in some way as
part of my overall retirement savings.

Is there some way to convert them to something else without incurring a
tax liability?

Thanks!

Re: Series E Savings Bond Question

It looks like you could convert them to HH savings bonds without an
immediate tax consequence. See


John Cowart

Re: Series E Savings Bond Question

BRH <> writes:

> I have approximately 30 individual Series E (yes - E, not EE) US Savings
> Bonds which will reach full maturity (30 years) in a few years. (These
> are bonds in my name that I bought myself through payroll deductions).
>
> I would rather not cash them in (and get hit with a large tax bill), if
> I can help it. But, from what I understand, they will no longer earn
> interest after they mature.

Double-check this, but I believe that when savings bonds hit final
maturity and cease earning interest, the deferred interest becomes
taxable that year whether or not you cash them in.

--
Rich Carreiro

Re: Series E Savings Bond Question

bo peep wrote:
> It looks like you could convert them to HH savings bonds without an
> immediate tax consequence. See
>
>
> John Cowart
>


I believe the Treasury stopped issuing series HH bonds about a year ago,
and they weren't replaced with anything. :-(

Best regards,
Bob

Re: Series E Savings Bond Question

Go here:



Put the inventory into the wizard, it'll give you values and other info. If
the bonds are over 30 years old they simply stop earning interest.

Good luck


"BRH" <> wrote in message
news:
>I have approximately 30 individual Series E (yes - E, not EE) US Savings
>Bonds which will reach full maturity (30 years) in a few years. (These are
>bonds in my name that I bought myself through payroll deductions).
>
> I would rather not cash them in (and get hit with a large tax bill), if I
> can help it. But, from what I understand, they will no longer earn
> interest after they mature. I would prefer to apply them in some way as
> part of my overall retirement savings.
>
> Is there some way to convert them to something else without incurring a
> tax liability?
>
> Thanks!
>

Re: Series E Savings Bond Question

I already use the Wizard. That's how I know that the bonds will be
reaching maturity soon.

I know that they will stop earning interest when they mature. I would
like to convert them to something else that would continue earning
interest. And I would like to have that conversion to have no tax
consequence.

If a viable option to do this exists, I would be interested in hearing
about it.

Thanks.




BMS wrote:
> Go here:
>
>
>
> Put the inventory into the wizard, it'll give you values and other info. If
> the bonds are over 30 years old they simply stop earning interest.
>
> Good luck
>
>
> "BRH" <> wrote in message
> news:
>
>>I have approximately 30 individual Series E (yes - E, not EE) US Savings
>>Bonds which will reach full maturity (30 years) in a few years. (These are
>>bonds in my name that I bought myself through payroll deductions).
>>
>>I would rather not cash them in (and get hit with a large tax bill), if I
>>can help it. But, from what I understand, they will no longer earn
>>interest after they mature. I would prefer to apply them in some way as
>>part of my overall retirement savings.
>>
>>Is there some way to convert them to something else without incurring a
>>tax liability?
>>
>>Thanks!
>>
>
>

Re: Series E Savings Bond Question

zxcvbob <> writes:
> bo peep wrote:

> > It looks like you could convert them to HH savings bonds without an
> > immediate tax consequence. See
> >

> I believe the Treasury stopped issuing series HH bonds about a year
> ago, and they weren't replaced with anything. :-(


Notice: August 31st, 2004 was the last issue date for HH/H
Bonds. After August 31, 2004, the government discontinued the exchange
of bonds for HH/H bonds. Current holders of HH/H Bonds will not need
to do anything different than they normally would have.

As far as I can tell, there's nothing the OP can do to
avoid the tax hit other than sit on the bonds and just
stop earning interest. Rich suggested that one might owe
taxes on the bond in the year in which it matures whether
one cashes it in or not - I could not find any reference to
this on the Treasury site, so I couldn't confirm it.

On

it says:
You can postpone reporting the EE/E Bond's accumulated
interest for Federal income tax purposes until you
redeem the bond or the bond stops earning interest 30
years (40 years if the issue date is before 12/1965).
When EE Bonds in TreasuryDirect accounts stop earning
interest, they're automatically redeemed and the
interest earned is reported for Federal income tax
purposes.

That *suggests* that taxes are due as Rich indicated, but
it's not exactly clear.

--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! --
Are you posting responses that are easy for others to follow?

Re: Series E Savings Bond Question

writes:

> As far as I can tell, there's nothing the OP can do to
> avoid the tax hit other than sit on the bonds and just
> stop earning interest. Rich suggested that one might owe
> taxes on the bond in the year in which it matures whether
> one cashes it in or not - I could not find any reference to
> this on the Treasury site, so I couldn't confirm it.

IRS Publication 550 says with respect to postponing reporting
accrued interest on savings bonds:
"Postpone reporting the interest until the *earlier* [my emphasis]
of the year you cash or dispose of the bonds or the year in which
they mature."

--
Rich Carreiro