Undoing a registration where the owner isn’t the principal owner
Tuesday, March 1st, 2005
Categorized as: Savings Bond registration changes
I am 63 years old and have about $50,000 in EE bonds titled with my daughter’s name (she is 30 years old and married) as owner and I am listed as the co-owner. Now that I’m retired and my daughter is on her own, I want to retitle the bonds in my name. What is the best way to handle this situation?
This is a complicated situation and you’ll want to handle it carefully.
The form to use for this is Public Debt Form 4000.
The form has a section on it that explains in some detail the tax consequences of changing the registration.
The section at first seems to be calling the first-named registrant the owner, the second the co-owner, and saying that you can’t change the owner without creating a taxable event.
However, it goes on to define the principal co-owner as the person who put up the money to buy the bonds and the section ends with the following in bold type:
Unless we are otherwise informed, the first-named coowner will be considered the principal coowner for the purposes of this transaction.
There’s no place on the form itself to specify that you, who put up all the money for the bonds, are the principal co-owner, even though your name is listed second in the current registration.
However, the quoted sentence makes it clear that you could attach a letter to the form explaining that you are the principal co-owner and you want to remove your daughter’s name from the bonds.
In your letter you should also say that if this will cause a taxable event you want the bonds returned to you without a registration change, just in case you get an agent who hasn’t handled this type of transaction before.