? on possible article error
In article 8-14-13 By J.L. is talking about tax treatment of annunity payments Post Tax money then stated:
Example: You purchase an annuity for $100,000 that is annuitized over 20 years and guarantees annual payments of $6,500. Each year, $1,500 of your distribution will be tax free and $5,000 ($100,000/20 = $5,000) will be taxable.
Why would the 1/20 of your already taxed money be taxed again but the Interest be tax free?
Permalink Submitted by David Mertz on Thu, 2019-03-14 16:07
Yes, that statement has it backwards. It should read, “Each year, $1,500 of your distribution will be taxable and $5,000 ($100,000/20 = $5,000) will be tax free.”