us savings bonds

in new york, if us savings bonds are in the name of a deceased person and a living co-owner, how is the value of the bonds calculated for estate assessment purposes.

10-5-2001

DEAR JED13NY:

You can go to the website www.savingsbond.gov and find the section on the right hand of the page that says "WHAT ARE YOUR SAVINGS BONDS WORTH" and click on the "Savings Bond Calculator" to do the calculation online.

Also of interest to you would be the FAQ section (further on down the same page) entitled "CASHING/REPLACING QUESTIONS"--after you click on this link you will find a section called "DECEASED BOND OWNER" and when you click on this you will find instructions:

The living bond owner can redeem the bond by presenting it with proper identification at any financial institution that pays savings bonds (a bank, savings/loan, etc.), or

If you don't want to cash it in now, you can file a claim to get it re-registered in the living bond owner's name only.

SINCERELY,

[email protected]

OCT. 6, 2001

DEAR JED13NY:

I forgot to mention in my previous response that since the savings bonds were co-owned, the concept of joint tenancy comes into play. The ownership of the bonds automatically transfers to the living owner and therefore belong to the new owner entirely. These bonds ARE NOT an estate asset and DO NOT have to be reported as any part of the estate.

SINCERELY,

[email protected]

thank you so much for all your valuable information. my main concern was whether the living coowner would have to pay estate or income taxes.

Bonds

Sooner or later those income taxes will have to be paid on that
built up interest...there's no "stepped up" value on bonds like there is on other assets. I believe I'm correct on this?