The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: Changes in Series EE to HH Savings Bonds||Date: 7/28/2004 2:38 PM|
|Author: SisypheanFool||Number: 72682 of 121802|
None of them are close to maturing unfortunately.
That's cause you're so young...right?!?
can I just attach a spread sheet with my bond data to the form?
Yes. I use the Savings Bond Wizard and just created a custom report that listed the bonds to be redeemed. In the field where you list the bonds, I referenced the attached inventory by number of pages, number of bonds and date on the report.
You can use any spreadsheet format as an inventory attachment, (not limited to the SBW report) so long as it provides the information on the Treasury form's list.
I also paid $0.55 to get Delivery Confirmation when I sent them for peace of mind. IMO, it's not worth the cost to use Certified/Registered/Priority/Express options since the Treasury will reissue bonds that get lost. The Delivery Confirmation should provide adequate proof to the Treasury that they were sent prior to the expiration of the conversion period should they get lost in the mail.
What am I missing to this seemingly "no brainer"?
If they're were all maturing at the same time soon, I could see looking at the tax benefit to extend the redemption period via HH conversion keeping in mind that over 50% of the redemption value is taxable).
I started assisting an elder in his financial mgmt and found that he had over 20 bonds that had matured. I sent him with a list to retrieve them out of his safe deposit box to redeem so we could reinvest.
What he did was pull over 20 of the largest denomination bonds and redeemed them instead.
Granted, this tale doesn't directly relate to this, but the result does - he jumped his taxable rate 2 steps and ended up paying ~36% tax on the interest (of bonds that had several years to maturity).
Just to finish the story, we had to hold the matured bonds until the next tax year to redeem. Plus convert the bonds, that were coming mature over the next 2 years, to HH so we can 'amortize' the redemption period over several tax years so we keep the taxable rate down.
It pencils out to be <2% net benefit (increased tax rate vs. lost potential interest of other instruments) - which isn't much, but enough to make it worth doing this way.
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