Legal Question in Tax Law in California

Re: gift vs inheritance

No. If you receive something from somebody else without consideration (meaning without something of equal value in return) while that person is alive, it is a gift. You can only inherit something from the estate of a deceased person.

What are you concerned about here? Gift Taxes or Income Taxes? There is probably no way to avoid the income taxes (unless you are using the bonds to pay for higher education, and then you need to speak to a CPA or attorney), unless your brother waited until he passed away and they stepped up in basis.

The gift tax, unless you brother has an estate worth over a million dollars, is probably not going to impact you. If the bonds are worth more then 12,000 dollars, your brother needs to file a gift tax return, but unless he has already utilized his 1 Million dollar gift tax lifetime credit, he can probably apply this to the gift to you (meaning no gift tax). There are negatives to this for people with larger estates, and any such action should be discussed with an attorney or CPA prior to the exchange.

Re: gift vs inheritance

If he gave them to you when he is alive it is a gift