topic Rolling inherited iBonds into 529 in Education

Rolling inherited iBonds into 529

DisneyDiva — Wed, 11 Feb 2026 10:13:49 GMT

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!

Re: Rolling inherited iBonds into 529

Hal_Al — Sun, 01 Sep 2024 11:36:11 GMT

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.

Reference: https://www.treasurydirect.gov/savings-bonds/tax-information-ee-i-bonds/using-bonds-for-higher-education/

Re: Rolling inherited iBonds into 529

DisneyDiva — Sun, 01 Sep 2024 15:58:31 GMT

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...

Re: Rolling inherited iBonds into 529

Hal_Al — Sun, 01 Sep 2024 19:05:54 GMT

It's in the wording. The don't specifically say "original owner". Instead, they say "They must be issued in your name"

Reference: https://rbcc-int.fiscal.treasury.gov/savings-bonds/tax-information-ee-i-bonds/using-bonds-for-higher-education/