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Dad has "several" US Savings Bonds that matured years ago.....he has not cashed them in because he does not want to be taxed for the additional income. Can he ask his bank to roll these old bonds into a Roth IRA as long as the amount is less than the $6000 limit?

Thanks in advance for your response.

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No.

If he's eligible to contribute $6000 this year, of course he can use that money just as well as any other money.

sox said: Dad has "several" US Savings Bonds that matured years ago.....he has not cashed them in because he does not want to be taxed for the additional income. Can he ask his bank to roll these old bonds into a Roth IRA as long as the amount is less than the $6000 limit?

Thanks in advance for your response.


The only way to avoid the taxability of interest on U.S. savings bonds after they've matured is if ALL of the following conditions are met:

1.) They are Series EE savings bonds issued at any date or I-Bonds issued after 1990.
2.) The owner of the bonds was at least 24 years of age at the time of purchase.
2.) The savings bonds are in the name of a parent or guardian, and the child is NOT a co-owner (but the child can be the beneficiary).
3.) The bonds are applied to qualified tuition & related expenses.


I believe that it is possible to buy savings bonds using what's called a Self-Directed IRA, but why on earth would you do that when the tax on the interest on the bonds can be deferred until you cash them in? Bonds like these are better kept out of the IRA when other things more taxable-liable can be kept in them.

sox said: Dad has "several" US Savings Bonds that matured years ago.....he has not cashed them in because he does not want to be taxed for the additional income. Can he ask his bank to roll these old bonds into a Roth IRA as long as the amount is less than the $6000 limit?

Thanks in advance for your response.


If it's already matured, then what's the use of holding onto them? Might as well get them cashed and move the money to something better regardless of paying tax or whatnot.

NDogg said: If it's already matured, then what's the use of holding onto them? Might as well get them cashed and move the money to something better regardless of paying tax or whatnot.
Well, it might be worth losing a year's interest if you thought your tax rate would drop a lot in the next year. A bond that's matured will have a lot of accrued interest (and tax liability).

LH2004 said: No.

If he's eligible to contribute $6000 this year, of course he can use that money just as well as any other money.


He will owe taxes on the accurred interest that is rolled in - if he does this.

xerty said: NDogg said: If it's already matured, then what's the use of holding onto them? Might as well get them cashed and move the money to something better regardless of paying tax or whatnot.
Well, it might be worth losing a year's interest if you thought your tax rate would drop a lot in the next year. A bond that's matured will have a lot of accrued interest (and tax liability).


This is bad advice. When a savings bond matures, interest MUST be reported in the year of maturity even if you do not redeem the bond. You cannot elect to defer it until you get around to redeeming the bond. The OP's father may need to file amended tax returns.

Will the IRS come after you? Don't ask me, I'm not an enrolled agent.



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