How to be counted as gift giver for I-Bond purchased for my child?

If I defer reporting interest until redemption, but then transfer it to my kid's account before redemption, who ends up owing the tax on all that deferred interest? Me or my kid?

The person who redeems the bond is responsible for paying tax on all the interest that has accrued over the life of the bond. So if you transfer it to your daughter and she later redeems it, she would report all the interest that accumulated, including the interest that accrued while it was in your gift box. If you choose the deferral method (which most people do), the tax liability effectively transfers with the bond itself. This can be advantageous if your child is in a lower tax bracket when she eventually redeems it. Just make sure she understands that when she redeems it, she'll need to report all accumulated interest on her tax return for that year.

How does taxr.ai handle stuff like this that isn't specifically tax forms? I've got a bunch of weird investment situations (not just I-bonds but also some inherited stocks with basis issues) and I'm trying to figure out if it could help with that too or if it's just for regular tax forms.

Is this like an AI chatbot thing or actual tax professionals? Because I've tried those AI tax helpers before and they just regurgitated IRS publication text without actually answering my specific question. Treasury Direct's site is already confusing enough!

It handles investment documents really well, not just standard tax forms. I uploaded statements from my brokerage account and Treasury Direct confirmation emails, and it extracted the relevant tax information and explained the implications. It was particularly helpful with understanding basis calculation methods for those inherited stocks you mentioned - that's actually a common use case. It's not just a chatbot that repeats generic info. It specifically analyzes your documents and provides personalized guidance based on what it finds in them. What made it different from other tools I tried was that it could actually interpret the Treasury Direct statements and point to the specific parts that matter for tax reporting, rather than just giving general advice.

Wait, how does this even work? They somehow get you through to a real person at Treasury Direct? Their phone system is literally the worst I've ever dealt with - I tried calling 6 times last month and never got through.

Sounds like just another paid service trying to solve a problem that shouldn't exist in the first place. Why should we have to pay to talk to a government agency we already fund with our tax dollars? The whole system is broken if services like this need to exist.

It basically holds your place in line and calls you when an agent is available. Instead of you waiting on hold for hours, their system waits for you and calls when someone can actually help. I was skeptical at first too, but I got a call back in about 35 minutes when I'd previously wasted hours trying to get through. I get the frustration about having to use a service like this, but for me it was worth it just to get a definitive answer about my bonds. The Treasury Direct agent was actually really helpful once I got through - gave me specific guidance about how to handle the transfer timing to minimize tax implications and walked me through the entire process while I was on the phone with them.

Thank you for this info! I didn't realize the annual purchase limit could affect when I can deliver the gift. My daughter hasn't purchased any I-Bonds herself (she's still young), so I should be able to transfer it now. Does the purchase limit also apply to minors? And does this mean I should report the interest on my taxes for last year since I still technically owned it?

Yes, the $10,000 annual purchase limit applies to everyone regardless of age, so even minors have their own separate limit. That's actually why some parents set up accounts for their kids - each person gets their own limit. Since your daughter hasn't purchased any bonds herself, you can definitely transfer your gift to her account now without hitting any limits. As for reporting the interest, if you've been deferring interest reporting (which most people do), you don't need to report anything until the bond is actually redeemed. Once you transfer it to her, the obligation to eventually report that interest transfers to her as well. If you've been reporting interest annually (which is less common), then yes, you would report the interest that accrued while it was still in your gift box.

I've worked as a tax preparer for 10 years and have never seen an audit specifically about I-bond gift box transfers. The IRS generally has bigger fish to fry. Just document when you purchased it and when you transfer it, and you'll be fine. Most people use the deferred interest method anyway, so it doesn't become a tax issue until someone actually cashes the bond.

This is really helpful, thank you! I've been overthinking this whole situation. Just to confirm - when I transfer the bond from my gift box to my daughter's account, does TreasuryDirect automatically generate any kind of documentation showing the transfer date? I want to make sure I have proper records in case I need them later. Also, since she's only 12, I assume I'll still be managing her TreasuryDirect account until she's older - does that affect the tax treatment at all, or is she still considered the owner once the transfer is complete?