Philanthropy Puzzler: Bonds...Saving Bonds | Sharpe Group
Posted June 27th, 2023

Philanthropy Puzzler: Bonds…Saving Bonds

Question: A donor has U.S. savings bonds purchased years before and would like to use them to make a charitable gift. Can the donor give the bonds, similar to giving shares of stock, and avoid any tax on the increase in the bonds’ value?

Answer: Treasury rules don’t allow you to transfer the bonds directly to charity. The donor would need to redeem the bonds and pay tax on the interest earned. They can, however, contribute the redemption proceeds and receive a charitable income tax deduction if they itemize. This will reduce or possibly eliminate the tax owed. Depending on the total value of the bonds, the donor might consider a charitable gift that provides them with lifetime payments. In this case, the donor would be entitled to a deduction for a portion of the gift’s value.


The “Philanthropy Puzzler” features gift questions fundraisers may encounter in the field, followed by solutions from our panel of experts. If you would like to send us your own “puzzler,” please email us at with “Philanthropy Puzzler” in the subject line.

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