Private annuities: proposed regulations would negate income tax benefits.(federaltax)

From: California CPA | Date: December 1, 2006| Author: Josephs, Stuart R. | Copyright information

Regulations [Sec. 1.72-6(e) and 1.1001-1(j)], proposed Oct. 18, 2006, addressed the income tax treatment of property exchanged for an annuity contract.

BACKGROUND

Gross income includes any amount received as an annuity under an annuity contract [IRC Sec. 72(a)]. However, Sec. 72(b) provides that gross income excludes that part of such receipt which bears the same ratio to this receipt as the investment in the contract bears to the contract's expected return. ...

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