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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Our church gave our Pastor 13K to be put in an annuity for

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Our church gave our Pastor 13K to be put in an annuity for him to take with him when he retires in 2-3 years. As the owner the church can take money out whenever it wants. However, there is an 8 year surrender period with this contract. Right now we are in the 2nd year of the contract, so the withdrawal charge is 8%. This diminishes as time passes. The church (owner) can withdraw 10% of the value per contract year with no withdrawal charges. Anything over that 10% (approximately $700) will be assessed the 8% surrender fee. The church, as the owner, is responsible for that fee. We are going to take out 2K to pay for the Pastors sabbatical.

Should I record the value of the annuity on the church books?



Megan C :

Thanks for your question and thanks for using

Megan C :

Yes, you should record the value of the annuity on the church's books, Julia

Megan C :

Then, as your pastor vests, you will write off the cost of the asset as a compensation expense

Megan C :

Do you have any further questions? Is there anything else I can assist you with today?

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