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Author: 2laz2p Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Savings Bonds and taxes Date: 11/6/1998 8:37 AM
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Situation. From 1981 to 1986 we purchased Series EE bonds in our daughters name naming us as beneficiary. We are now concerned that they will be counted as assets to her when she applies for college. and financial aid. She is a junior in high school now. They currently are worth $8200 of which 3600 was principal. We are solidly in the 31% tax bracket (AGI 60000)
Questions. 1. If we cash them in now can we file amended returns for her for the past 3 years to minimize the effect of the income? Her earned income this year is about $1500.
2. Can she gift the entire amount back to us and what effect does that have on our income as well as hers? We would then reinvest the entire amount into a vehicle with a higher return so the money would be available when her student loans become due, post-college graduation. Suggestions on this would also be appreciated.

Please note that we also have the similar situation woith our son who is a sophomore.

Thanks for any ideas.

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