Distribution from non-qualified annuity not in payout status

Submitted by Leo Nunez on Tue, 2019-04-09 19:26

My client took a distribution from a non-qualified annuity last year. Since she has not started a payout from her annuity, is the distribution considered a return of premium that would not be subject to federal tax and reduce her exclusion ratio in the future?

Thanks for your help.



Submitted by Alan - IRA critic on Tue, 2019-04-09 19:43

Unless the annuity was issued before 1983, the gains come out first unless the account is annuitized. Since the distribution was in 2018, client should have received a 1099R showing the taxable gains in Box 2a.

Submitted by Leo Nunez on Wed, 2019-04-10 14:37

Thanks

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