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Bill
Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3153
Experience:  EA, CEBS - 35 years experience providing financial advice
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In 2000 I invested 125,000 in stock using the total worth of

Resolved Question:

In 2000 I invested 125,000 in stock using the total worth of three annuities. The part of the value that was untaxed dollars was 50000. The 125000 investment has now become 75000. If I withdraw 25000 from this account what part will be taxable?
Submitted: 7 years ago.
Category: Tax
Expert:  Bill replied 7 years ago.
Just to clarify, did you invest in stock from the surrender of 3 annuities or vice versa?
Customer: replied 7 years ago.
I invested in a Flexible Premium Variable Deferred Annuity Policy with GE Life and Annuity Assurance Company. The money was from 3 annuities - two with COVA and one with PFL - obviously one of my worst finncial decisions
Expert:  Bill replied 7 years ago.

Assuming you did 1035 tax-deferred exchanges totalling $125,000 ($50,000 gain plus original investment costs of $75,000) from the 3 annuities directly to GE and your original investment cost in the 3 annuities was originally $75,000 then if you withdraw $25,000 it will be tax-free due to the decline in value. You will essentially be recovering part of your investment cost.

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