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Lane
Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3113
Experience:  Providing Financial & Tax advice since 1986
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capital gain on variable annuity ( Hartford) on my dads estate

Resolved Question:

capital gain on variable annuity ( Hartford) on my dad's estate rev trust
How much tax will the estate owe? Gain $101,000.00
Submitted: 4 months ago.
Category: Tax
Expert:  Lane replied 4 months ago.

Lane :

Hi,

Lane :

Typically the income from annuities is ordinary income rather than capital gains (because of the deferrqal feathur

Lane :

sorry fr the typo "deferral" feature

Lane :

Ot's called income in respect of a decedent

Lane :

Also? typically annuities have a named beneficiary ... it's only in the case where there was no beneficiary on file that te estate is taxed

Lane :

Was there a beneficiary on file with the insurance company, Hartford?

Lane :

Another questons that will determine that answer to your questions\'; was the annuiy owned individually OR was the annuity inside an IRA?

Customer:

Hartford beneficiary was the trust

Customer:

the annuity was not an IRA

Lane :

OK and this was a revocable trust right?

Lane :

k

Customer:

that.s correct

Lane :

OK this will either be reported on the las tax return of the decedent (preferable) because the individual's tax brackets are at higher levels (same income taxed al lower levels) OR on the trusts tax return (1041)

Customer:

1041

Lane :

k then...

Lane :

If taxable income is: The tax is:


Not over $2,450 15% of the taxable income


Over $2,450 but $367.50 plus 25% of
not over $5,700 the excess over $2,450


Over $5,700 but $1,180 plus 28% of
not over $8,750 the excess over $5,700


Over $8,750 but $2,034 plus 33% of
not over $11,950 the excess over $8,750


Over $11,950 $3,090 plus 39.6% of
the excess over $11,950

Customer:

ok

Lane :

Th IS progressive so not ALL at 39.6, but rather esch piece at the respective brackets (along wiyth any other income for the estate)

Lane :

so 3960 + .39 x (101000 - 3960) all other things being equaL

Customer:

there is very little other taxable income. Would you say about $39,000 would be a ball park figure?

Lane :

YEP

Lane :

You have it

Customer:

ok that answer's my question

Lane :

Glad to help!

Lane :

If this has helped, I would appreciate a feedback rating of 3 (OK) or better (excellent, is ideal)… That's the only I get credit for the work.


However, if you need more on this, please come back here, so you won't be charged for another question.

Lane, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 3113
Experience: Providing Financial & Tax advice since 1986
Lane and 4 other Tax Specialists are ready to help you
Expert:  Lane replied 4 months ago.

Thanks for the rating Jack!


If you'd like to work with me again, you can either (1) add me as a preferred expert on your home page, (2) say “For Lane only,” at the beginning of another question OR (3) use my profile page: by clicking here: Lane

(You can also copy and paste that Lane link for future reference)



Thanks again,


Lane

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