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Posted by Herb Smith on March 26, 2007, 11:35 am
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> Many years ago, we bought some Series EE bonds for our
> daughter as part of a college savings plan. =A0We purchased
> them jointly with both my name and my daughters name on the
> bonds and using her SS# as the tax ID. =A0At the time, we were
> above the income threshhold for receiving tax-free gains
> when using the money for tuition. =A0Unfortunately, I am
> currently unemployed and am unlikely to exceed the income
> threshhold again this year.
>
> Question: =A0Now that she is in college, is there a way to
> change the SS# on the bonds or have her gift the bonds to
> me so that we might take advantage of using the bonds for
> tuition without paying taxes on the gains?
There might be a way to do this, provided that when the
bonds were purchased only your funds were used. Whose SSN is
on the bond is irrelevant for purposes of ownership.
US savings bonds may be retitled in the name of only one of
the co- owners (you) and no tax will be immediately due,
since the other co- owner (your daughter) did not provide
any funds for the initial purchase. This will result in the
bonds being titled in your name alone, with the accrued
interest still untaxed.
The bonds can then be used in the US Savings Bond
Educational Program, whereas there is no tax due if the
funds are used to pay qualifying educational expenses for
college.
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