Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

I am the beneficiary of my deceased sister's annuity. Do I…

I am the beneficiary...

I am the beneficiary of my deceased sister's annuity. Do I have to pay income tax on the money?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

She had not paid tax on the annuity when she bought it.

Show More
Show Less
Ask Your Own Tax Question
Answered in 5 minutes by:
3/20/2018
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,578
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
Verified

Hello. Thank you for choosing this Q&A service for assistance. My name is***** will be assisting you. There are different types of annuities and taxation is different. What type of annuity is it?

Ask Your Own Tax Question
Customer reply replied 1 month ago
It was a variable.

Ok. I will check on that and get back to you shortly.

Ask Your Own Tax Question

Is it a qualified or non-qualified variable annuity?

Ask Your Own Tax Question
Customer reply replied 1 month ago
It was qualified.

In brief, it is taxable as ordinary income to you. SEE BELOW:

----------------------------------------

A qualified annuity is taxed identically to any other qualified account such as an IRA, 401(k), profit sharing plan or other tax-deferred retirement account.

Taxation at Death – Non-Spousal Beneficiary – At your death, the death benefit will be paid to the non-spousal beneficiaries you have designated. By doing so, the transfer will avoid probate. Unlike most other securities, there is no step-up in cost basis at your death. Instead, any deferred income in the policy will be taxable to the beneficiaries as ordinary income at their tax rates. If a death benefit is paid out that is higher than the account value, the difference between the death benefit and the amount you invested, adjusted for any withdrawals, will be taxable as ordinary income to the beneficiaries. The value of the variable annuity policy also will be included in your estate for estate tax purposes. Beneficiaries have the choice of taking a lump sum payment or receiving the payments over a period of time, thereby spreading out the income tax liability.

REFERENCE SOURCE:

https://www.edwardjones.com/investments-services/insurance/annuities/taxation.html

-------------------------------------

In closing, my goal is to provide you with the best experience possible! Hopefully, the service that I have provided has earned a 5-star rating! Please remember to rate my service by selecting the 5 stars at the top of the screen before you leave today. Thank you in advance. If you require further assistance, use the reply box and let me know.

Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,578
Experience: 3+ decades of varied tax industry exp. Tax Biz owner
Verified
Tax.appeal.168 and 87 other Tax Specialists are ready to help you
Ask your own question now
Was this answer helpful?
Ask Tax.appeal.168 Your Own Question
Tax.appeal.168
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 4,578
4,578 Satisfied Customers
Experience: 3+ decades of varied tax industry exp. Tax Biz owner

Tax.appeal.168 is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,451 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

56 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,124 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
If there is no federal tax liability in 2016 because there
If there is no federal tax liability in 2016 because there was no income in 2016, what is the minimum estimated tax that needs to be sent with the extension for 2017 to avoid a penalty?… read more
Tax.appeal.168
Tax.appeal.168
Tax Accountant
4,578 satisfied customers
Looking for estimated tax rate for 500,000 income in 2017.
looking for estimated tax rate for 500,000 income in 2017 … read more
Richard
Richard
Tax Attorney
Doctoral Degree
4,451 satisfied customers
Any estate tax on 401K beneficiary funds in Arizona?
any estate tax on 401K beneficiary funds in Arizona? … read more
Dr. Fiona Chen
Dr. Fiona Chen
President
Ph.D.
938 satisfied customers
I have a question about -term capital gain tax rate for 2018
I have a question about long-term capital gain tax rate for 2018 for an investment property … read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,954 satisfied customers
Must file a 1041 what are the tax rates? estate got a1099r
estate got a1099r for a deferred annuitiy for $10,690.84 … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
I have a question about term capital gain tax rate for 2018.
I have a question about long term capital gain tax rate for 2018. I bought a commercial property under my name and held on to it for 4 years. I sold it in January 2018. I filed my income tax return fo… read more
Barbara
Barbara
Enrolled Agent, Paralegal
4,954 satisfied customers
Tax rate on stored company property in Theodore, Alabama and
Tax rate on stored company property in Theodore, Alabama and do you pay property tax on 100% of the value. (Stored off shore oil and gas equipment/tools)… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,124 satisfied customers
What is the tax rate of capital gain when I sell the rental
What is the tax rate of capital gain when I sell the rental property in the regular yearly income tax bracket of 10-15%? … read more
Carter McBride
Carter McBride
LLM
973 satisfied customers
GILTI tax. According to new tax bill, what is the tax rate
GILTI tax. According to new tax bill, what is the tax rate for GILTI income of a foreign corporation owned by a US individual?… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,124 satisfied customers
Are benefits received as the beneficiary of a life insurance
are benefits received as the beneficiary of a life insurance policy taxable? … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,124 satisfied customers
My question is how to change the tax rate on the Panasonic
My name is ***** ***** My question is how to change the tax rate on the Panasonic 7500? thank you … read more
taxmanrog
taxmanrog
Master\u0027s Degree
915 satisfied customers
If I don't have any ordinary income, only social security
if I don't have any ordinary income, only social security and have a long term capital gain from the sale of a business, how would it be treated for tax purposes? … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,082 satisfied customers
If I don't have any ordinary income, only social security
Second opinion] if I don't have any ordinary income, only social security and have a long term capital gain from the sale of a business, how would it be treated for tax purposes? … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
Will the new tax rates for businesses apply to sole
Will the new tax rates for businesses apply to sole proprietor medical practices? … read more
emc011075
emc011075
Senior Tax Specialist
Bachelor's Degree
16 satisfied customers
Assuming a Medicare tax rate of 1.45% and monthly gross
Assuming a Medicare tax rate of 1.45% and monthly gross wages of $2,500, the amount recorded in Medicare Tax Payable for one quarter for the employee's payroll deduction is… read more
taxmanrog
taxmanrog
Master\u0027s Degree
915 satisfied customers
What are the taxes rates 2016 for term gains in irrevocable
what are the taxes rates 2016 for long term gains in irrevocable trusts … read more
Chad EA, CFP ®
Chad EA, CFP ®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,082 satisfied customers
Given that the current 1041 tax rate on 401(k) income is
Given that the current 1041 tax rate on 401(k) income is $3206 + 39.6% over $12,400, what will be the new tax rate and will it apply for 2017?… read more
PDtax
PDtax
Owner
Master\u0027s Degree
1 satisfied customers
I have a question regarding the ordinary income tax. If the
Hello, I have a question regarding the ordinary income tax. If the ordinary income tax due is negative does that apply anywhere? This pertains to the sale of an S corp .business. … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,124 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x