Permalink Submitted by Alan - IRA critic on Tue, 2018-10-09 04:34
An annuity can either be purchased in an IRA (IRA annuity), or more often are non qualified annuities. IRA annuities are taxed under the IRA rules, and NQ annuities under the very different annuity rules.For a NQ annuity, if the annuity is not annuitized, the gains will come out first and are taxed as ordinary income. If you annuitize the contract later on, each payment will be part investment and part gains. Therefore, your taxes will be incurred somewhat later than if you did not annuitize and then took distributions with the first distributions being fully taxable until the gains are down to 0.
Permalink Submitted by Bruce Steiner on Wed, 2018-10-10 22:15
An annuity in an IRA is tax neutral. However, outside an IRA or qualified plan, an annuity converts all of the qualified dividends and capital gains to ordinary income.
Permalink Submitted by Alan - IRA critic on Tue, 2018-10-09 04:34
An annuity can either be purchased in an IRA (IRA annuity), or more often are non qualified annuities. IRA annuities are taxed under the IRA rules, and NQ annuities under the very different annuity rules.For a NQ annuity, if the annuity is not annuitized, the gains will come out first and are taxed as ordinary income. If you annuitize the contract later on, each payment will be part investment and part gains. Therefore, your taxes will be incurred somewhat later than if you did not annuitize and then took distributions with the first distributions being fully taxable until the gains are down to 0.
Permalink Submitted by Bruce Steiner on Wed, 2018-10-10 22:15
An annuity in an IRA is tax neutral. However, outside an IRA or qualified plan, an annuity converts all of the qualified dividends and capital gains to ordinary income.