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Solved

Annuities/Taxes

Forum|Forum|1 year ago
January 16, 2025
1 reply
0 views

My dad had an annuity that we are considering continuing in my mother's name. He passed away in August of last year. Are there any tax benefits to her taking payments now versus leaving it all in the fund until her passing? She doesn't need the funds right now, and I don't want her to pay more taxes on additional income. I will be the beneficiary, and I don't want to have to pay taxes on the whole thing, either! Currently, it is about $60,000, and she is 92.

I also read that I can roll it over into an IRA, which might be the best option if it eventually comes to me.

What is the recommendation?

Best answer by Mike9241

If the annuity is a non-qualified annuity (an annuity that’s not held inside an IRA or company retirement plan), it cannot be rolled over to an IRA. However, if the annuity is a qualified annuity (such as an IRA annuity), then it can be rolled over or transferred into an IRA. The tax rules in effect at that time would have to be complied with.

however, sooner or later someone is going to have to pay income taxes on the annuity or IRA because there is no step-up in basis. The term income in respect of a descendant is what applies to this asset.

If the annuity is a non-qualified annuity (an annuity that’s not held inside an IRA or company retirement plan), it cannot be rolled over to an IRA. However, if the annuity is a qualified annuity (such as an IRA annuity), then it can be rolled over or transferred into an IRA. The tax rules in effect at that time would have to be complied with.

however, sooner or later someone is going to have to pay income taxes on the annuity or IRA because there is no step-up in basis. The term income in respect of a descendant is what applies to this asset.