Treasury Direct Allowing/Instructing Gifting More Than $10,000 in I Bonds

Many are reporting (1, 2, 3) on an email being sent out from US Treasury Direct encouraging people to send of their undelivered gift I Bonds now and not to wait. The treasury has confirmed the email is legit.

Background

We wrote about the I Bonds gifting loophole in this prior article. Basically it’s a way of locking in the current I Bonds rate for years to come, while waiting to deliver them in $10,000 increments to max out the annual I Bonds yearly limit.

Apparently it’s been an open secret that the $10,000 gifting limit is not actually enforced, meaning that you can gift someone $20,000 or $100,000, etc. You can also buy $10,000 directly and then immediately receive a gift for another $10,000 or $100,000 or whatever amount.

Some speculate that the gifting limitation verbiage (“Bonds purchased or transferred as gifts will be included in the computation of this limit for the account of the recipient for the year in which the bonds are delivered to the recipient.”) is only meant to say that someone who has already received $10,000 in I Bonds gifts can no longer buy MORE. But that it was never meant to limit receiving I Bonds as a gift after having already purchased $10,000, and it never meant to limit the volume of I Bonds gifting.

The Email

In any case, the email is telling people to gift the I Bonds, and Treasury reps are telling people that changes are coming to I Bond gifting soon. Possibly they’re sunsetting the entire I Bonds gifting or changing limit or whatnot.

Reps are instructing people to gift their entire I Bonds stash now without limits and without waiting for the $10,000 limit to reset in January.

Personally, me and my brother have $10,000 locked in a previous high I Bonds rate and we’ve been gifting each other $10,000 each January with the older rate lock. I’ll wait until more info comes out before sending over the gift since I’m already maxed out with the $10,000 gift I received in January of this year.

I don’t mind waiting to learn more since I’m not buying more right now regardless. This news will matter more to someone who wants to lock in the 1.3%/1.2% fixed rates since the alleged unlimited gifting will make it possible to lock in an unlimited amount if you have a gifting partner. (Just be aware of the tax form reporting requirement.)

Hat tip to reader JD