tax and penalties

L1: tax and penaltiesI would like to know if I withdraw 10% out of my non-qualified annuity, do I pay a penalty for early withdrawl to the IRS? I am 48. I rolled it to this annuity over a year ago. I have a question about cost basis. Do I get taxed on all earnings, or is there a loss cost basis involved. EG: started with 100,000, now it is worth 50,000,is there a 50,000 tax free earnings until I reach the 100,000 that I started with.2010-02-04 22:15, By: jean, IP: [24.43.117.194]
L2: tax and penaltiesAny withdrawals, to the extent that there is a gain in the contract, are subject to the 10% pre-age 59.5 penalty and ordinary income tax. If there is no gain, there is no 10% penalty and no tax to withdraw your basis.With that said, the insurance company probably has surrender charges that will allow them to recapture any commissions paid to the agent that sold you the annuity.2010-02-04 22:24, By: Gfw, IP: [216.80.125.206]

L3: tax and penaltiesDoes that mean gain in the current contract? What about the loss in the contract before I rolled it into the current one? What happens tax wise with that loss?2010-02-04 22:32, By: jean, IP: [24.43.117.194]

L4: tax and penaltiesIf you did a valid 1035 Exchange, the old basis would have transferred to the new contract. If no 1035 Exchange, then no loss would have been transferred.You really need to contact the insurance agent that sold you the contract or the insurance company that issued the contract – they are the only ones that can give you specific information on what is taxable or non-taxable.2010-02-04 22:46, By: Gfw, IP: [216.80.125.206]