The problem with selling them is that only $10k per SSN can be invested
in I-bonds, and the I-bonds yield many multiples above the pathetic yield on MMF/s, CD’s, or bank
accounts. So the rungs on the I-bond ladder would be getting taken out. This isn’t a problem
if you’re not building a position in I-bonds, as you just buy a new one to take the place of the
one sold. But if say a 10 rung ( years ) ladder is wanted, and you’re still accumulating rungs,
then I don’t see any loophole, either pay taxes yearly and keep meticulous records, or have a much bigger tax bite to deal with whenever maturity or liquidation occur.
Thanks Joe. That $10K limit per SS# only happened in 2012. Some of us have positions from before then, which is the basis for the concern. As concerns go, it’s a good one to have. Just looked at my bonds from 2000, and they are earning 10.85%. I guess I might consider running the numbers to see if it’s worth cashing in a few years early if the rate goes back down, but for now that’s a good safe investment to hold on to. As long as cashing one in doesn’t trigger taxes on all the others, I’m good with that.
IP