IRA Transfer of Annuitized IRA
Hello,
If an IRA annuity has been annuitized but offers a commutable value for withdrawal, is it possible to conduct a transfer/rollover to a brokerage IRA without creating a taxable distribution?
My understanding is that you can transfer an IRA annuity to a brokerage IRA without triggering taxes, but is this also true for an IRA annuity that has been annuitized?
Thanks
Mike
Permalink Submitted by Alan Spross on Fri, 2009-09-18 00:54
If the insurer will offer a lump sum distribution in lieu of the annuitized payout, there is no reason that it cannot be rolled over to a brokerage IRA. The insurer may or may not offer a direct TT transfer, but if not an indirect rollover should do the job. Like any other rollover, it would be reported as such on line 15 of Form 1040.
If taxpayer has been using the annuitized payout for RMD compliance and the payout qualifies, there is no reason why RMDs cannot return to a determination from the prior year end balance. I am not aware of a specific IRS Regulation on this issue, but the only logical conclusion is that the annuity payout amount will cover the year the annuitized payout ends (there was no prior year end balance), and the year end balance will govern the year following the year the annuitized payout ends.