923 / How are Series E/EE and H/HH United States Savings Bonds valued for federal transfer tax purposes?

Apparently, they are valued at their redemption value on the applicable valuation date. In Revenue Ruling 55-278,¹ A, in 1948, bought Series E bonds with his own funds and had them registered in the names of A and B in the alternative as co-owners. In 1953, A had the bonds reissued in the name of B alone in order to effect a gift to him of A’s co-ownership therein. The IRS held that the value of the gift made by A to B in 1953 was the redemption value of the bonds at the time they were reissued. The Service found that, “since Series E United States savings bonds are generally nonnegotiable and nontransferable, they are nonmarketable and, accordingly, have no particular ‘market’ value. Although ownership therein is transferable by death and by reissue in certain cases…, their only definitely indicated or ascertainable value is the amount at which they are redeemable by the United States Treasury.” Presumably, the same would be true of Series H/HH bonds, since they are likewise nonnegotiable and nontransferable.

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1. 1955-1 CB 471.