Appreciate your help with question for tax-deferred annuity.
Client invested 650k in a tax deferred annuity about 5 years ago.
In Jan 08, the fmv of the annuity was around 1 million.
Client was 70.
She started taking 5k per month in distributions.
Administrator of annuity said that since fmv > cost for annuity...all
of the 5k would be taxable.
Is this correct, or am I allowed to use the Simplified Method to
allocate cost of annuity to each distribution based on her life
expectancy?
Thank you,
Ira Klein
Rye, NY
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