Page 47 - Interest Income - Individuals

Transfer to a Trust

 If you own Series E, Series EE, or Series I bonds
and transfer them to a trust, giving up all rights

of ownership, you must include in your income
for that year the interest earned to the date of
transfer if you have not already reported it.
 However, if you are considered the owner of
the trust and if the increase in value both
before and after the transfer continues to be
taxable to you, you can continue to defer
reporting the interest earned each year.
 You must include the total interest in your
income in the year you cash or dispose of the
bonds or the year the bonds finally mature,

whichever is earlier. Transfer
 The same rules apply to previously unreported
interest on Series EE or Series E bonds if the
transfer to a trust consisted of Series HH or
Series H bonds you acquired in a trade for the
Series EE or Series E bonds. See Savings bonds
traded, later. 45