Are beneficiaries taxed on the interest accumulated inside the annuity?
Author: Ammon Yorke
Website: http://www.AnnuityYes.com
Added: Sat, Jun 24, 2006 8:47:41
Category: Annuity Questions
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Beneficiaries will be taxed on the tax-deferred interest that has been accumulated inside the annuity, provided that they have received the money. But if an owner dies and his/her beneficiary is his/her spouse, the latter has the option to proceed with the annuity plan and defer paying taxes as well. In this case, the client has the sole right when to pay income taxes.
In cases where the owner dies and the beneficiary is not the spouse, the beneficiary must withdraw the money within five years or it will be received over a certain period determined by the annuity assurance company. This option, however, is applicable when this is elected for the first 12 months after the plan owner’s death.
See also: Annuities | Taxes About the Author:
Ammon Yorke answers frequently asked annuity questions at PrettyGreatAnswers.com.
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