Join us at 1 p.m. ET Thursday for a live Q&A on frequently asked coronavirus questions. Learn more.
by Linda Stern, From the AARP Bulletin Print Edition, September 29, 2010
Q. My mother is giving us U.S. savings bonds that she owns. Will I have to pay taxes on them?
A. To transfer ownership of the bonds to you, your mom will essentially have to redeem them and get them reissued in your name. She'll have to pay income tax on the accumulated interest she earned while holding them. When you subsequently redeem them, you will owe taxes only on the interest that accumulated while you owned the bonds.
From a tax viewpoint, it might be better all around if your mom held on to these securities until her death and bequeathed them to you. She would pay no taxes on interest while still living and you'd inherit the bonds at their current value. All of the gains and interest received until that point would simply be considered part of her estate, meaning you might well end up paying no taxes on them. But estate taxes are complex; it's best to consult a tax adviser about the specifics of your situation.
Linda Stern writes on the economy and taxes.
Please leave your comment below.
You must be logged in to leave a comment.
Visit the AARP state page for information about events, news and resources near you.
Free calculators to help manage your money
Rate bonus on high-yield online savings account
Real-life solutions to help close the retirement savings gap
AARP members receive exclusive member benefits & affect social change.
You are leaving AARP.org and going to the website of our trusted provider. The provider’s terms, conditions and policies apply. Please return to AARP.org to learn more about other benefits.
Your email address is now confirmed.
Manage your email preferences and tell us which topics interest you so that we can prioritize the information you receive.
Explore all that AARP has to offer.
In the next 24 hours, you will receive an email to confirm your subscription to receive emails
related to AARP volunteering. Once you confirm that subscription, you will regularly
receive communications related to AARP volunteering. In the meantime, please feel free
to search for ways to make a difference in your community at