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emc011075, Tax adviser
Category: Tax
Satisfied Customers: 2311
Experience:  IRS licensed Enrolled Agent and tax instructor
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I recently retired (January). I rolled my 401k into an annuity.

Customer Question

I recently retired (January). I rolled my 401k into an annuity. Cercumstances have required me to withdraw the total amount. I am trying to estimate my 2015 tax liability. Do I include the surrender charges as income? If the total distribution is less than my initial deposit can I claim the loss?
Submitted: 1 year ago.
Category: Tax
Expert:  emc011075 replied 1 year ago.
Hi. My name is ***** ***** I will be happy to help you.
I am assuming there were no tax taken out or paid on the roll over, so the money currently in the annuity are still pre tax. Which means, you only include in your income what you actually received from the annuity, not what you rolled over. For example if your 401k had 45K and that's the amount you rolled over into annuity, but you only received 40K from the annuity, you will report 40K on your 2015 tax return as income.
You cannot claim the loss because you never paid tax on the amount at the first place. Pre tax retirement accounts are not treated the same way as investment accounts funded with after tax money.
I see you offline now. So if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.
Expert:  emc011075 replied 1 year ago.
I see you read my respond but didn't get any feedback. Do you have any questions? Is there anything else I can help you with today?
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