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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Sonki who wrote (530)	7/26/2000 9:10:04 AM
From: J. M. Blackburn	Respond to of 10065

Sonki: I have an order form in front of me that I picked up at my local (small) bank for I Bonds. The problem with buying them over the Internet, is that you can only buy $500 at a time. Why do you have to pay credit card in advance?? I'm not 100% sure but I believe interest is paid when you cash in the bonds and is taxed as ordinary income. (No long term gains) Interest could vary according to inflation rate. I'm not sure that I am going to buy any. It seems like too much of a hassle for little gain and less liquidity. By stepped up, if you mean cost basis, I doubt it. There is an excellent site which explains "I" Bonds but I can't seem to find it right now. If no one comes up with it, I have it on my computer at work and I will be there Saturday night. Let me know if you need it. Good Luck. Jim

To: Sonki who wrote (530)	7/26/2000 9:49:50 AM
From: Investor2	Respond to of 10065

I-Bonds publicdebt.treas.gov publicdebt.treas.gov Best wishes, I2

To: Sonki who wrote (530)	7/26/2000 10:51:29 AM
From: Ken Brown	Respond to of 10065

Hi, Sonki, I've only bought I-Bonds via the website. It's a bit of a hassle (less so with Internet Explorer's "AutoComplete"), as you can only buy $500 at a time. The purchase is not a cash advance, it's a regular credit card purchase. So, if you use a card that gives you a bonus for purchases, you're that much better off. Also, the best time to buy is after your credit card cycle closes, as I-Bonds pay from the beginning of the month regardless of when they're bought. (But you have to be careful, because if you buy too near the very end of the month, the purchase may not go through until the next month. With my card, I've found it takes only 2 business days to get payment, so as long as I buy before about the 28th or so, I'm safe.) I'm not a tax expert, but I'm about 99.9% certain that the gain from selling these is ordinary income, regardless of how long they're held. They are free from state & local taxes, and the tax can be deferred for up to 30 years (by not cashing them in, that is), but there's no cap gains benefit, AFAIK. Too late for I-Bonds? I don't think this is a purchase that really needs to be timed. You just need to decide if it's the right type of instrument to include in your asset mix. For an EXCELLENT, detailed FAQ on I-Bonds, go to: socialize.morningstar.com click on Fund Forum "Vanguard Diehards", and enter 6316 in the "Jump to #" box. This will take you to the conversation titled "Updated I Bond Tutorial". Ken