I Bonds at TreasuryDirect

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worryfreeinvestor
Posts: 145
Joined: Thu Mar 24, 2005 6:17 pm
Location: Seattle, WA

I Bonds at TreasuryDirect

Post by worryfreeinvestor »

A desperate question from one who fears inflation...

A "U.S. Person" can invest up to $30K annually in a US savings bond that has an inflation-adjusted, real return. It's called an "I Bond". One opens an account directly with the US Treasury via a service called TreasuryDirect. (If only the Bank of Canada had such a service for investors!) However, one must be a "US Person", which 8 USC 1101(a)(20) defines as a Legal Permanent Resident and 8 USC 1324b(a)(3) defines as protected individuals such as refugees (mostly Salvadoran contras from the Age of Reagan, as I read it).

Anyway, I figure a Canadian on a TN1 or HB does not cut the mustard. Does anyone know of a loophole?
nelsona
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Post by nelsona »

The treasury department as generally viewed US persons as those who are tax residents (and would include resident aliens, like you). Your definition (hastily found in google, no doubt) probably has nothing to do with the Treasury, but rather National Security issues.

IRS definitions talk of a US person as a 'resident' makingno distinction in that definition between an 'alien resident' and a 'lawful permanent resident', while such distinctions are made elsewhere.

IRC sec 7701

There are many TNs and Hs <i>et al</i> who buy I-bonds etc.

Only an alien living outside US would be prevented from buying these bonds, which is similar to the proscription on CSB purchases.

<i>nelsona non grata... and non pro</i>
worryfreeinvestor
Posts: 145
Joined: Thu Mar 24, 2005 6:17 pm
Location: Seattle, WA

Post by worryfreeinvestor »

Thanks, that is great news. I'm glad I asked. My info came from the horse's mouth, i.e. the TreasuryDirect help desk. I've got quite a little e-mail thread going with a lady there and she referred me to the relevant sections of the U.S.C.
barb1948
Posts: 6
Joined: Fri Jul 01, 2005 9:19 am

Post by barb1948 »

Regarding the Series I bonds and EE Bonds: A U.S. person can acutually purchase $60,000 in the I's and the EE's per year. It is a little know fact that you can purchase $30,000 over the internet, which are called electronic purchases, and you can purchase $30,000 called paper bonds.. They are trying to get away from paper bonds, but until they do --they can still be bought...mostly from a Bank. You can go to www.Treasury Direct and scroll around to find 'How to purchase paper bonds.'. Barbara
worryfreeinvestor
Posts: 145
Joined: Thu Mar 24, 2005 6:17 pm
Location: Seattle, WA

I-Bonds

Post by worryfreeinvestor »

What if I lose my job and visa and have to move back to Canada? Do you think I have to cash in my I-Bonds or does the fact that I was a tax-resident when I purchased them mean that I can keep them?
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Once you have them, they are yours to keep (same rule for CSB if you leave canada).

They will only be taxed where you LIVE.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
worryfreeinvestor
Posts: 145
Joined: Thu Mar 24, 2005 6:17 pm
Location: Seattle, WA

Post by worryfreeinvestor »

Thanks again, nelsona. Because the TreasuryDirect help desk gave me bad advice before, with reference to who is a resident in its eyes, can I ask you to please post the legal/regulatory reference that will allow me to keep the I-Bonds if I go back to Canada?
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Post by nelsona »

Your on your own there.

However, The treasury dept only says who can BUY bonds, and cannot FORCE anyone to sell them.

and since the treaty specifically discusses the tax treatment of bonds of one country held by residents of another, there is no issue.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
rg1495
Posts: 43
Joined: Sun Jan 29, 2006 12:54 pm

canadian commuter

Post by rg1495 »

Nelson, Can a canadian commuter who works in US buy these bonds as well?...I live in canada and work in US on H1b.
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
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Post by nelsona »

Probably not, your a non-citizen living outside US... I don't sell bonds, the treasury doies, ask them.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
pokka
Posts: 29
Joined: Sat Feb 27, 2021 10:16 pm

Re: I Bonds at TreasuryDirect

Post by pokka »

Does anyone know how Canadian taxation of I bonds works for US citizens living in Canada? I have been thinking about buying some, and they seem great from just a pure US point of view.
Thanks!
nelsona
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Location: Nowhere, man

Re: I Bonds at TreasuryDirect

Post by nelsona »

As I answered 16 years ago, you will only be taxed on these bonds where you live -- Canada.

You will report them on your 1040, but will re-sourced the income to Canada, and reduce the US tax to 0.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
pokka
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Joined: Sat Feb 27, 2021 10:16 pm

Re: I Bonds at TreasuryDirect

Post by pokka »

Thanks!

And do I pay tax on the growth annually or can I just pay when it matures in 30 years or when I cash it out?
nelsona
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Re: I Bonds at TreasuryDirect

Post by nelsona »

Canada requires yearly income reporting whether you receive the interest or let it accrue.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
pokka
Posts: 29
Joined: Sat Feb 27, 2021 10:16 pm

Re: I Bonds at TreasuryDirect

Post by pokka »

Thanks so much!
It makes it less attractive for me of course, but maybe still worth thinking about.
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