Personal Investments • Can ibonds be cashed out to a 529 tax free?

I have ibonds that are now starting to decline in % interest. Can I sell them and then put that money into our 529 without being taxed?

Ibonds I had purchased for myself and my wife:
10k Purchased 01-01-2022
10k Purchased 01-01-2022
10k Purchased 05-01-2022
10k Purchased 04-01-2022 (in gift box to be deliv 1/24)
10k Purchased 08-01-2022 (in gift box to be deliv 1/24)

Yes, contributions to a 529 Plans are considered to be a qualifying educational expense if you meet the income limits. It's very important that to qualify for the tax-free use, the child cannot be an owner or co-owner (being a beneficiary is OK). In addition to these requirements/limitations, you must deposit ALL of the proceeds from the I Bond redemption in order to qualify.

Statistics: Posted by Mel Lindauer — Mon Dec 18, 2023 12:18 am — Replies 2 — Views 227

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