Recording Series I-Bonds and their interest

crowslivebig
crowslivebig Quicken Windows Subscription Member ✭✭
edited September 2023 in Investing (Windows)

I have read a lot of posts about this subject but I’m still confused. Following very helpful instructions from @Jim_Harman and @q_lurker I have created an offline brokerage account with no securities and a $0 balance. So, I think I transfer money from my savings account to this new brokerage account then create a security for the iBond and purchase it using a Buy (not Bond buy). Does this seem right so far? (I’ll make a similar account for my husband’s iBonds.)

One point of confusion is do I need to make a separate security for each iBond that my husband and I buy? I purchased $10k twice with issue dates of 10/1/22 and 4/1/23. (Security History on Treasury Direct shows purchase request on 10/14/22 and 4/12/23 with security issued on 10/17/22 and 4/13/23.) Do I use the issue dates? My husband purchased $10k twice with issue dates of 5/1/22 and 4/1/23 (Security History on Treasury Direct shows purchase request on 4/29/22 and 4/12/23 with security issued on 5/2/22 and 4/13/23.) Should I manage these in our shared Quicken account as four separate securities? Or three securities with the two issued on 4/1/23 using the same security? Or something else?

My goal is have an accurate idea of the value of these bonds over time for use in things like graphing our net worth over time. Since we plan to hold these for a long time, I really don’t want to adjust their values for early withdrawal penalties which, if I understand correctly, is what Treasury Direct reports in the early years. I’m not even sure what value to use for interest or when or how to post it. When I look at my current holdings on Treasury Direct, I see a current value but I don’t see any way to find the dates and amounts of interest payments. Do I use the Reinvint transaction? I saw some discussion of capital gains considerations but I’m afraid I didn’t understand.

Any help will be greatly appreciated.

Comments

  • Jim_Harman
    Jim_Harman Quicken Windows Subscription SuperUser ✭✭✭✭✭

    These are good questions. See comments marked with »

    I have read a lot of posts about this subject but I’m still confused. Following very helpful instructions from @Jim_Harman and @q_lurker I have created an offline brokerage account with no securities and a $0 balance. So, I think I transfer money from my savings account to this new brokerage account then create a security for the iBond and purchase it using a Buy (not Bond buy). Does this seem right so far? (I’ll make a similar account for my husband’s iBonds.)

    » Right, you start by transferring cash into the IBond account. Assuming your husband has his own Treasury Direct account, reporting and reconciling will be easier if he has his own account in Quicken.

    One point of confusion is do I need to make a separate security for each iBond that my husband and I buy?

    »Yes

    I purchased $10k twice with issue dates of 10/1/22 and 4/1/23. (Security History on Treasury Direct shows purchase request on 10/14/22 and 4/12/23 with security issued on 10/17/22 and 4/13/23.) Do I use the issue dates?

    » It is probably best to use the issue dates.

    My husband purchased $10k twice with issue dates of 5/1/22 and 4/1/23 (Security History on Treasury Direct shows purchase request on 4/29/22 and 4/12/23 with security issued on 5/2/22 and 4/13/23.) Should I manage these in our shared Quicken account as four separate securities? Or three securities with the two issued on 4/1/23 using the same security? Or something else?

    » 4 securities, 2 in your account and 2 in his if he has his own Treasury Direct account.

    My goal is have an accurate idea of the value of these bonds over time for use in things like graphing our net worth over time. Since we plan to hold these for a long time, I really don’t want to adjust their values for early withdrawal penalties which, if I understand correctly, is what Treasury Direct reports in the early years. I’m not even sure what value to use for interest or when or how to post it. When I look at my current holdings on Treasury Direct, I see a current value but I don’t see any way to find the dates and amounts of interest payments. Do I use the Reinvint transaction? I saw some discussion of capital gains considerations but I’m afraid I didn’t understand.

    »Usually people defer I bond interest until they redeem the bond. The bond's value is increasing year by year and thus should be reflected in your net worth, but the increase should not show as taxable income.  

    In this case, go to the account you created and enter a Buy (not Bonds bought) for one “share” at the amount you paid for the bond. If you receive the bond as a gift, you would enter an Add instead.

    As interest accrues and the I bond’s value increases over the years, you can increase the bond's "share" price to match its current value as shown on a statement or the Treasury Direct site. You can do this by going to the Security Detail view for the bond, then click on More and Edit Price History. If you have several bonds to update, you can go to the account and click on Holdings. Next to Show: select Value. Set the correct date next to As of: and enter the values in the Quote/price column.

    Then when you redeem the bond, you would lower its price back to the purchase price and record an Int payment for the total interest, then record the sale. That should make Quicken's net worth and tax calculations correct.

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  • q_lurker
    q_lurker Quicken Windows Subscription SuperUser ✭✭✭✭✭

    If the 4/1/23 issue dates in your account and your husband’s account are the same maturity and interest rate, I would have them as the same security, meaning 3 overall, rather than the 4 Jim suggested.

  • crowslivebig
    crowslivebig Quicken Windows Subscription Member ✭✭

    Thank you for your helpful and quick replies, @Jim_Harman and @q_lurker . (Sorry for the delayed thanks, my computer completely died.) I am coming up for air and have a few follow-up questions with which I would appreciate help.

    1. USING SAME OR DIFFERENT TICKER Regarding whether to use the same ticker for my husband's bond and mine for bonds issued at the same interest rate and maturity date, if I use the same ticker do you anticipate any issues if we sell our bonds at different times or sell different fractions of our bonds (not even sure if you can liquidate a fraction)?
    2. ASSET CLASS A little issue: do you have a suggestion for the asset class? Government bonds isn't given as an option. Choices include Domestic Bonds, Unclassified, and Custom.
    3. DATE INTEREST POSTS Another little issue: Do you have an opinion on what date is best to use for the interest payments? I think that Treasury Direct posts payments on the 1st. They don't show payments for the three most current months but I am trying to ignore that penalty period in my Quicken records. Treasury Direct doesn't show historical values, but I believe I have cracked the code for how they allocate interest and have made an Excel spreadsheet for my bonds (no small feat!). If I had a bond issued in May, then I think the interest should post on May 1st which seems a bit odd but, as far as I can tell, this makes the numbers agree with those once TD reports values. Does that sound right to you?

  • q_lurker
    q_lurker Quicken Windows Subscription SuperUser ✭✭✭✭✭
    1. Won’t be any issues if they are truly the same bond, same CUSIP identifier.
    2. Once you select the Domestic Bond, you’ll get the opportunity to set them as Government Bonds with a maturity date.
    3. No comment to offer in the interest dates.

  • crowslivebig
    crowslivebig Quicken Windows Subscription Member ✭✭

    Thank you, @q_lurker !

This discussion has been closed.

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