... on the Series H/HH bonds, unless, under the grantor trust provisions of the Internal Revenue Code, the owner of the bonds is treated as the owner of the portion of the trust represented by the ... interest on the reissued bonds If the bondowner is treated as the owner of that portion, the accumulated interest continues to be income of the bondowner rather than of the trust and, therefore, the ... Inheritance Tax The transfer of ownership of savings bonds resulting from the death of the owner is subject to state inheritance and estate tax In the case of coowner bonds, many states follow the rule...