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I have an Annuity that is an IRA that I rolled over from a…

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I have an Annuity that...
I have an Annuity that is an IRA that I rolled over from a brokerage account with Fidelity 3 years ago. I am now 74 and I am retired and am not married.

I have an opportunity to take a 10% free withdrawal from my annuity this year, if I don't take it I will lose it. Can I roll that 10% free withdrawal by transfer or roll over into an E-trade account set up as an IRA(to purchase no load mutual funds) without paying any taxes on the transfer/rollover?
Submitted: 8 years ago.Category: Tax
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Answered in 13 minutes by:
6/24/2010
Tax Professional: Lev, Tax Advisor replied 8 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,301
Experience: Taxes, Immigration, Labor Relations
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As long as your annuity distribution is made inside your IRA account - it is not taxable.

You also may roll over funds from your IRA account to another IRA account tax free.

 

In additional - you may choose to roll over funds from your IRA account into Roth IRA account.

Please be aware of new rules for conversions and rollovers from IRAs and employer plans to Roth IRAs. For any conversions or rollovers in 2010, any amounts that are required to be included in income are included in income in equal amounts in 2011 and 2012. If you elect otherwise, you can choose to include the entire amount in income in 2010.

 

Because you are 74 - there is a Required Minimum Distributions (RMD).

If you are the owner of a traditional IRA, you must generally start receiving distributions from your IRA by April 1 of the year following the year in which you reach age 70½. April 1 of the year following the year in which you reach age 70½ is referred to as the required beginning date.

 

You will find more information about your IRA account in IRS publication 590 - www.irs.gov/pub/irs-pdf/p590.pdf

Let me know if you need any help.

 

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