Question re: waiting time for funds from bonds.

[woodsprite]

Not sure this is the correct forum, but figured it would be the closest I could find. Son got late acceptance into a 2-wk study trip (starting on 1/7, $7k covers everything except airfare). Hubby and I had saved bonds for edu purposes for both kids to be used for study abroad trips. Daughter did both of hers mid-year so no question with hers. Now we have to cash in some for our son and pay for his trip.

The question hubby and I are going back/forth over is do we cash them out before Jan 1 or after? I’m worried doing it so late since I thought there was a waiting period for amounts over $1k before you can use the funds for payment. Hubby is more concerned about tax implications. Value-wise there was minuscule difference.

Looking for someone who may have a clue or who has done something similar, because I certainly have no idea.

[A HERETIC I AM]

1. If you are worried about tax implications, if you have any, it doesn't matter ....

if it's before 1/1 or after, you'll either owe it for 2022 or 2023. If you might owe any capital gains (If you sell the bonds for more than you paid for them) the only difference in tax rate depends on how long you held them for. If you held them for longer than a year on the date of sale, the taxable rate is going to be lower, but again, that's ONLY on any gains. Unless you have a huge amount,. the tax liability won't be that much. Bonds don't appreciate like other securities.

What type of bonds are you talking about? As far as the waiting period you mention, are they Regular US Treasuries? Savings bonds? Corporate? Municipals?


Here's a page from TreasuryDirect about taxes on Series EE bonds;

https://www.treasurydirect.gov/savings-bonds/tax-information-ee-i-bonds/