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Anne
Anne, Master Tax Preparer
Category: Tax
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Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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How do I handle large Surrender fees imposed on annuity cash

Customer Question

How do I handle large Surrender fees imposed on annuity cash surrender contracts?
Ellen McIntosh
Submitted: 1 year ago.
Category: Tax
Expert:  Anne replied 1 year ago.
Hi
I'm Anne. I've been preparing taxes for 27 years and I'll be helping you tonight.
Since you didn't pay the salesperson's commission, you don't get to deduct the surrender charge. Instead, your loss is already accounted for in the surrender value of the annuity. You would be accounting for surrender charges twice if you claimed a loss on an annuity and tried to deduct the surrender charge in the same year. Your surrender value that you receive is already net of surrender charges.
Please see URL below:
http://ctainvest.org/home/investing/annuities/What-Happens-When-You-Surrender-an-Annuity.aspx
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