Q: I have Series EE Savings Bonds worth close to $100,000. I don't want to leave them in my estate where they will be hit with income and estate taxes. Can I avoid the untaxed appreciation in value by transferring the bonds to a charitable trust? R.B., Houston, Texas
A: No, you cannot avoid it. The accrued interest is taxed when the bonds are redeemed or they mature. If they are left in your taxable estate, the unreported interest is treated as taxable income. You also can't avoid the tax hit by passing the bonds to charity through a trust or some other vehicle. Advice: You can reduce a huge current tax liability be converting EE bonds to HH bonds.
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