Non Qualified Annuity
Not an IRA question but if someone has a non qualified annuity and annuitize it prior to age 59.5 would the portion of each payment that arrives prior to age 59.5 represent a gain be coded as a premature distribution. And would that be the case whether the person did a life annuitization, or a 20 year period certain annuitization.
Permalink Submitted by Alan - IRA critic on Tue, 2020-07-21 19:11
Non qualified annuity distributions receive a penalty waiver in Sec 72q as long as the annuitization meets the definition of an “immediate annuity”. The exception can be claimed using Form 5329, code12 (Other Exceptions).