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While your argument may have merit, the only way to be sure is to attempt to take the "surrender charge" as a deduction and wait to be audited. There is no definite way to be sure. The question would be... where to you take the deduction?
The instructions for line 30 are very specific in that you are to enter any penalty from early withdrawal of savings or certificates of deposit from form 1099-INT. Absent that form there is no mechanism I know of to account for the deduction you are speaking about.
If you attempt to use Schedule A Investment Expense deduction you will find that expenses for passive losses are not allowed. Annuities would be considered passive investments.
It's not that I don't empathize with your position, it's just that I'm trying to play "devil's advocate".
If you have further questions about this topic please get back to me.
Let me know what you decide and how you make out.
How would you get it to the E. If you look at page 2 of the Schedule E those entries come from either K-1's, Partnerships, Passive Activities (business or real estate), etc.
I know of no tax letters, rulings, etc. that address this issue.
I just think it would be disallowed at audit.
If want further discussion on this issue I am happy to continue. If you decide to go ahead, let me know how you make out.