Hi Mike, First thank you very much for your reply.
I just want to be sure our MAGI amount has nothing to do with this rule. I just visited an IRS office yesterday. They were very helpful but could not really find anything related to my question on withholding the purchase price of the bonds and depositing the interest only to a 529. They were under the impression that the total interest must be roll but the purchase price/face amount of the bonds could be withheld. Again, this was their impression and could not refer to any written rules either way. If possible, could you please refer me to where this might be outlined. Again, my sincere thanks.
