Step up basis for annuities?
Is there provision for a step up basis on a NQ annuity where the beneficiary is non-spouse? Annuity was purchased in 1985. Age at death was 75 and DOD was more than 1 year ago. No distributions have been taken. Originally $80,000. Current value $100,00.
Permalink Submitted by mk foss on Wed, 2011-08-17 16:50
There is no step up in basis under any circumstances for a NQ annuity – it’s the biggest drawback of using this investment. Anything in excess of what the original owner paid for it is taxable as ordinary income.