Have Tax Questions? Ask a Tax Expert for Answers ASAP
Since the annuity was lost but has been reimbursed by the bank there is no theft to report. Hence, you would only report the reimbursement of excess money over your basis as income from annuities.
Most distributions (both periodic and nonperiodic) from qualified retirement plans and nonqualified annuity contracts made to you before you reach age 59½ are subject to an additional tax of 10%. This tax applies to the part of the distribution that you must include in gross income. It does not apply to any part of a distribution that is tax free, such as amounts that represent a return of your cost or that were rolled over to another retirement plan.
Let me know if you have any question.
Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.
Yes, you will report the income from the annuity that is in excess of the money that you invested. It is advisable to report this amount separately.
Is the bank going to issue you a Form 1099R?