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Strengthening Your Bond With Philanthropy

Do you have old U.S. savings bonds tucked away for a rainy day? While you may have bought the bonds thinking that you would redeem them for cash or reinvestment, bonds are often forgotten. Or, some people put off redemption because the accumulated interest normally will be taxable. Read on to discover a way to use these bonds to support our mission.

Generally, when you redeem bonds you must report as taxable income the difference between each bond's redemption amount and the original purchase price. If you've exchanged Series EE bonds (formerly Series E) for Series HH bonds in the past, you'll finally be taxed on the accumulated interest when you redeem the Series HH bonds.*

If you never redeem your savings bonds, either your estate or the person then entitled to receive the bonds will usually be subject to income tax on the accumulated interest when the bonds are cashed. And the value of the bonds may be exposed to estate tax, too.

A Generous Solution
Currently, you cannot name a charitable organization as co-owner or beneficiary on the face of your bonds. So the best way to bypass the tax burden and make a charitable bequest is for your attorney to add a codicil to your will, or an amendment to your living trust, that leaves your bonds to Sisters Hospital Foundation. This way we will receive 100 percent of the value of the bonds—and your family can receive other assets that won't trigger income taxes.

How Long Will Your Bonds Earn Interest?
Series	Date of Issue	Number of Years Bonds Earn Interest
E	May 1941–November 1965	40 years
	December 1965–June 1980	30 years
H	June 1952–January 1957	29 years, 8 months
	February 1957–December 1979	30 years
Savings Notes	All issues	30 years
EE	All issues	30 years
I	All issues	30 years
HH	All issues	20 years
Source: www.savingsbonds.gov

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*Note that as of Sept. 1, 2004, you can no longer reinvest H/HH bonds or exchange E/EE for HH bonds.

The information in this Web site is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are for hypothetical purposes only and are subject to change. References to estate and income tax include federal taxes only. Individual state taxes and/or state law may impact your results.