If my father is thinking about cashing in $50,000 in EE US Government bonds today, would he pay taxes based on his regular income tax rate? He is 83, single, all income is social security and military retirement. OR if he dies before the bonds are due, will they become part of his estate. What would the estate pay in taxes? And if I inherited them what would I pay if my AGI is $75,000? Would it be better to cash them, Dad pay whatever in income tax and then deposit the money in his savings account where I am the direct beneficiary (does not become part of his estate) and then what tax would I incur?