non-qualified annuity death beneficiary
5 years have elapsed since my mother’s death and payment must be made on my portion of the settlement.the contract is non-qualifed and all monies over the cost basis are considered taxable in the year received. the cost basis is 9475. the current value is 57356. my spouse an d I have acombined income of approximately 90000. how can we limit our tax liability?
Permalink Submitted by bruce kubik on Fri, 2010-04-02 17:33
[quote=”lyndakubik”]5 years have elapsed since my mother’s death and payment must be made on my portion of the settlement.the contract is non-qualifed and all monies over the cost basis are considered taxable in the year received. the cost basis is 9475. the current value is 57356. my spouse an d I have acombined income of approximately 90000. how can we limit our tax liability?[/quote]
Permalink Submitted by Alan Spross on Fri, 2010-04-02 18:38
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There is no easy answer for limiting your liability, but I would have the amount of the investment double checked unless she made the annuity investment many years ago. The earnings amount seems high, but of course could also be correct.
Other than that, anything you can do to defer income to 2011 or increase itemized deductions this year will help to reduce your taxable income. This may involve such things as when you make contributions, pay property taxes and state income taxes, or even medical bills.
Perhaps you should have taken half of this amount in December so that the annuity income could have been split between 2009 and 2010, but you cannot do that now.