My mother passed away earlier this year, and had 5 iBonds with significant accrued interest. I was named as the Transfer on Death beneficiary on the iBonds, and I’m in the process of getting them re-registered in my name. I have 529 accounts for both of my daughters – currently age 14 and age 20 (in college and still noted as my dependent when filing). Assuming we meet the income parameters, am I able to take advantage of selling the iBonds and contributing to their 529’s to avoid taxation on the interest, or does that not work since I wasn’t the original purchaser? If I am eligible, do I need to hold the iBonds in my name for a certain period of time prior to liquidating? Thanks for any insights!
Q. Am I able to take advantage of selling the iBonds and contributing to their 529’s to avoid taxation on the interest, or does that not work since I wasn’t the original purchaser?
A. It does not work since you were not the original purchaser.
Thank you for sharing that article! My apologies, as I'm sure I'm missing it - can you please point to where it states that you must be the original owner? I'm not seeing it...
It's in the wording. The don't specifically say "original owner". Instead, they say "They must be issued in your name"