The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Converting EE Bonds to HH Bonds Date:  11/17/1998  8:43 PM
Author:  jagusta Number:  6352 of 127637

My mother has some old EE bonds earning minimum interest and wants a way transferring them to my son tax free and avoiding capital gain taxes. If she were to simply cash in the EE Bond she would have a $6000 gain.

A broker told her that she could convert the EE Bonds to HH Bonds and list my son as a co-owner of the bond under his SS number. He also said that after 6 months,
my son could cash in the bond free of any capital gain taxes. I'm aware of the 10K gifting strategy but this broker led my mom to believe that she could also avoid capital gains by this conversion/transfer. My mom asked
her attorney but he admittingly was clueless.

Does anyone know the whether this scheme is valid? Or can someone refer me to some on-line publication that might validate this scheme?
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us