I transferred two I-Bonds from my Treasury Direct Account to my daughter's Treasury direct Account resulting in a 1099 INT for me. I paid all the federal taxes due for the transferred I-Bonds on the accrued interest up to the date of transfer. When my daughter redeems those I-Bonds will she have to pay taxes for the accrued interest that I previously paid for? If not, then how would she report the accrued interest that she is liable for to the IRS?
