60 day rule
Client has 3 indexed annuities he wants to change to other type of investments with a different advisor; there are no early surrender charges remaining, two are IRA’s and one is NQ. To what extent does the 60 day rule apply on the two IRA’s? If he surrender’s the NQ annuity he would have to pay taxes on the gains… correct?
Permalink Submitted by Alan - IRA critic on Tue, 2021-06-29 17:20
Tax and possibly penalty would be due on the surrender of the NQ annuity, but this could be avoided if a 1035 exchange was done into a new annuity. For the IRAs, only one 60 day rollover can be done within a 12 month period, but a direct trustee transfer to another IRA or IRA annuity can be done without limit. The insurance companies should be asked how to efficiently execute a direct transfer to another provider such that there is no distribution and no 1099R issued. IRA tax rules and not annuity tax rules apply to IRA annuities.