I have Series EE Gov. Savings Bonds in both of my deceased parents names. I am the only child and executor of their estate. Can I cash the bonds and deposit the money into estate account to avoid paying income tax, then later withdraw? I live in NJ and do not know the tax law on this subject can someone give advise?

If as the executor you cash the bonds, then the estate will have interest income which you will have to include in the estate's income tax filing. If you pass them to the heirs, then eventually the heirs will cash them in and owe tax on the interest. So the choice of whether to cash them in now or later depends on who has the lower tax bracket - the estate or the heirs. Do it whichever way minimizes taxes.

By the way - there is often confusion on inheriting savings bonds as to whether they "step up" in cost basis when passed to heirs, like stocks do- unfortunately they do not, becase step up only applies to the cost basis for capital gains, not accrued interest. So if the heirs cash the bonds they would owe taxes on the full amount of interest.