Tax-free Savings Bond interest income using gifts to charities
Sunday, March 20th, 2005
Categorized as: Savings Bond taxes • Savings Bonds as gifts and prizes
Is there any way to avoid paying taxes on Savings Bond interest – for example, signing them over to a relative, transferring them to a grandchild’s education fund, or perhaps signing them over to a charity?
There is no legal way to avoid adding the income from your Savings Bond interest to your tax return. There are no rollovers, no sign-overs, and no do-overs.
However, although you always have to cash the bond and put the income on your return, you may be able to make an offsetting charitable deduction that will prevent you from actually paying taxes on the bond’s income.
But proceed with caution – there are important limitations even to charitable deductions that can get you in trouble with the IRS. Complete details are in my book.