Insurance/Annuities in IRAs and Contributions
The insurance company where I have my IRA is telling me that the bonus/enhancement that they pay annually into my annuity which is inside of my IRA and is over my contribution level, is not in conflict with IRS regulations. Is this correct, is it not considered a contribution? Can I still contribute to an IRA?
Thanks
Permalink Submitted by Alan Spross on Wed, 2008-06-25 17:33
More than likely they are correct since the addition is probably provided for in the contract and is tantamount to earnings from an investment. That said, not knowing the specifics it is hard to say for sure.
Unless the company must report a contribution on Form 5498 to you and the IRS, the bonus is NOT a contribution and you can make additional regular contributions to your IRA if you otherwise qualify.
Permalink Submitted by Al Fry on Wed, 2008-06-25 17:40
Alan is correct. It is an internal enhancement to the contract value, and not a contribution from you.