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Income Tax Planning
Chapter 4: Gross Income from Personal and Investment Activities/ANNUITY TAXATION
Warren Academy Course SyllabusSyllabus Slides
Chapter Study Session

Chapter 4: Gross Income from Personal and Investment Activities

ANNUITY TAXATION

01.Core Concepts

• For annuity starting dates after 12/31/1986 • Total exclusion cannot exceed investment in the contract • Un-recovered investment is taken as a deduction on the annuitant’s final income tax return. • Withdrawals before age 59½ are also subject to a 10% early distribution penalty. • Exceptions: Death and disability • Distributions prior to annuitization are taxed on LIFO basis.