Discussion:Annuity Transfer to Daughter
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| Revision as of 00:00, 12 June 2007 Riley2 (Talk | contribs) (Transfer to a li) ← Previous diff |
Revision as of 00:04, 12 June 2007 Mikelim (Talk | contribs) (For the whole am) Next diff → |
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| {{ForumReplyPost|UserID=Riley2|Date=12 June 2007|Text=Transfer to a living wife does not cause accleration. However, transfer to a daughter would be taxable.}} | {{ForumReplyPost|UserID=Riley2|Date=12 June 2007|Text=Transfer to a living wife does not cause accleration. However, transfer to a daughter would be taxable.}} | ||
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| + | {{ForumReplyPost|UserID=Mikelim|Date=12 June 2007|Text=For the whole amount?}} | ||
Revision as of 00:04, 12 June 2007
Discussion Forum Index --> Tax Questions --> Annuity Transfer to Daughter
| 24 May 2007 | |
| Since I know nothing about annuities, I thought I'd throw this up here.
I had a possible new client come to me saying that they had transfered ownership of her father's annuity to her and her mother because her father was beginning to lose his faculties. Her prior CPA assured her that this was not a taxable event, however, the annuity co treated this as a distribution. Is there a way to correct this? Or was she simply given bad advice from her prior CPA? | |
| 24 May 2007 | |
| If the money was taken out of the annuity, the income is taxable. | |
| 24 May 2007 | |
| Generally if an annuity is transferred to another one it's tax free. I'm not certain if this applies because of the change in name. | |
| 24 May 2007 | |
| That's the thing - no money was taken out of the annuity; ownership was simply transferred to the wife and daughter. I know that it is a non-taxable event if the ownership transfers to the spouse, but this got complicated because of the daughter. | |
| 24 May 2007 | |
| The prior CPA is wrong. The transfer of an annuity by lifetime gift is a taxable event, unless the transfer is made to a spouse. See Sec. 72(e)(4)(C)(i). | |
| 24 May 2007 | |
| Perhaps merely misunderstood. If the object was to preserve the assets there are a variety of survivor annuity options with a deferred rather than imediate starting date that would accomplish the purpose with no tax consequence. | |
| 25 May 2007 | |
| all accumulated growth is taxable to owner of annuity if he transfers his ownership interest | |
| 30 May 2007 | |
| Riley,
I looked at the code section; what about if the transfer went 50% to wife and 50% to his daughter? Could we make the case that only 50% is taxable, given that the other 50% is a non-taxable transfer to spouse? | |
| 30 May 2007 | |
| if wife was not an original joint owner of the contract, then no. | |
| 30 May 2007 | |
| Mike, if you are a member of NATP who attended last year's conference, you can download a PDF of my presentation of the Taxation of Annuities from the NATP website for free. If you are not a member, I would suggest that you look into joining an association that can help you at the level you practice.Kevinh5 | |
| 30 May 2007 | |
| Mikelim, a transfer to a spouse or former spouse would generally be exempt from the acceleration rule under 72(e)(4)(C)(ii). | |
| 31 May 2007 | |
| Kevin/Riley,
Thanks for the great information...I am definitely out of my element on this one. To clarify, the wife was an original joint owner of the contract - based on this, just adding transfering 50% of the interest to the daughter should result in only a 50% taxable event. Am I thinkng about this correctly? | |
| 11 June 2007 | |
| BUMP...
The wife was on the policy as well; since half of it was transferred, isn't his a 50% taxable, since half was "transferred" to the still living wife.? | |
| 12 June 2007 | |
| Transfer to a living wife does not cause accleration. However, transfer to a daughter would be taxable. | |
