US Treasury I-Bonds

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rustynavy
rustynavy Member
edited October 2023 in Investing (Windows)

Any recommendations on how to set up an I-Bond account?

Answers

  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
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    To track an I bond, you can set up an off-line Brokerage type investing account to hold all your I bonds. 

    To do this, go to Tools > Add account. At the bottom, select Offline account then Brokerage and follow the instructions. You can call the account "Treasury Direct" or whatever you like. Do not add any securities to the account. 

    Then go to Tools > Security List and click on Add security to create a Security for the bond. Click on the link at the bottom to enter the name manually. Leave the Ticker Symbol blank and give the bond a descriptive name like IBond 2052-08-31. Set the Security type to Other. The Bond type is for negotiable bonds, which does not apply to I bonds.

    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 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.

    If you choose to pay taxes as you go, you would buy as many shares of the security you created as the amount you paid for the bond at a price of $1.00. When the bond pays interest, you record it as a ReinvInt transaction.


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  • Ps56k2
    Ps56k2 Alumni ✭✭✭✭
    edited September 2023
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    everyone attacks this in their own way -

    I treated it as an offline account - similar to tracking our sons 529 account.
    I wanted to see the initial basis AND wanted to see the current net worth and gain -
    My approach was - enter the purchase - and then every so often, when I would look on the TD website to see the increase,
    I would calculate the price "increase" and enter that as an update to the "price/quote history" - which would then reflect the current increased value - the Quicken Market Value should of course then match the TD website bond values.

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