Deferred Annuity

Submitted by Dennis Bowman on Sun, 2008-10-05 19:36

I have some of my IRA in a deferred annuity, to get out of it I have to pay a surrender fee. Do I have to pay taxes on that fee?



Submitted by Al Fry on Sun, 2008-10-05 22:21

That is a matter of contention for some advisors. Most, however would say the 1099-R will show only the surrender amount, and should be reported for tax purposes.



Submitted by Alan Spross on Mon, 2008-10-06 04:44

Al,
How come the surrender charge would not be deducted from the contract balance, thereby avoiding any distribution?



Submitted by Al Fry on Mon, 2008-10-06 12:19

I believe it is the anti-annuity people that claim that. I do not know of any annuity tax experts that would say that. Al



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