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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Can we invest in these bonds in kids' names?   Will that constitute a gift?  We already contribute to their 529 (30K/yr per kid) to stay within the gift tax limits.  [/quote]

Yes, it is a gift just like your 529 contributions and any other money you transfer to their name. [/quote]

We have zero iBonds right now and want to build it up. How about this strategy?  This is assuming that interest rates are rising and ibond investments make sense.  We will allow the interest to compound for 30 years and let the inheritors deal with the tax liability.

Year 1 (right now) - We invest 40K (20K for us, 20K for our 2 kids).  We declare the 20K portion by filing form 709 (since we also contribute 30K to their 401k).
Year 2 and beyond.
    - Repeat.  40K (20+20).   
    - The kids also gift back the 20K from year 1 to us.  Since these are minors, we will be the ones transferring the money back to ourselves.
    - Overpay 5K to the IRS when filing taxes and get the refund as ibonds.

We repeat this each year and build up a 40K/yr portfolio.  We don't want to leave the money in our kids' names for a variety of reasons and would rather not dwell on that..

Will this work?  Can anyone think of any issues with this approach?
[/quote]

This sounds overly complicated and unnecessary. You would be way better off  just investing in a stock index. There isn't really anything that special about ibonds.[/quote]

Thanks!  We already do that.  We are almost 100% in stocks right now and want to diversify into fixed income as we get older. [/quote]

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