transfer of an annuity with an active 72t
L1: transfer of an annuity with an active 72t
An existing variable annuity has been distributing 72t for the past 4 years. Client will be 59 1/2 in 2 years. If the annuity were to be transferred into another annuity, there would be a surrender charge when coming out and a bonus in excess of the surrender
charge going into the new annuity. The 72t distributions will continue from the new account. Will the surrender charge/bonus bust the 72t?
2012-01-05 16:40, By: Lou, IP: [220.127.116.11]
L2: transfer of an annuity with an active 72t
No, the plan will not be affected becauseCLIENT is notmakinga contribution or taking a distribution, the insurer/IRA custodian is making the contribution and taking out the surrender charge. These amounts do not appear onthe 1099R, and therefore only
affect whatthe annuity IRA is worth. They do not have an impact on taxes orthe 72t plan.
The transfer should best be handled as a direct trustee transfer, and it is also advisable to have a full transfer rather than a partial, since partials have been known to cause IRS problems in the past.
Take extra precaution to make sure your total annual distributions from both contracts is correct. Ifthe transfer can be done early this yearand/or stop distributions from the current annuity, it would eliminateanextra1099R for 2012.
2012-01-06 02:05, By: Alan S., IP: [18.104.22.168]