If a person buys a (non-qualified) fixed annuity for 100K that grows to 175K and then dies, is there anything the beneficiary can do to defer taxes? What happens if the primary beneficary declines the money are there tax advantages to a secondary beneficairy? It seems to me that 75k will eventually be taxable but how can this 75K be deferred.

Thanks....
Larry

This depends on the distribution options offered by the insurer. The longer these can be stretched out, the longer taxes can be deferred. The taxation to the beneficiary is the same as it would have been to the annuity owner. For non annuitized contracts, this usually means that the earnings come out first and therefore the first distributions are fully taxed. If the annuity was issued prior to 8/82, different rules apply. For annuitized contracts, different rules also apply.

If the first beneficiary disclaims, the contingent beneficiary would be taxed in the same manner as the first beneficiary would have been taxed, and that is usually the same as the owner would have been taxed.

i don't know if anyone here is familiar with this website, [www.irs.gov] , (maybe u are & i'm offering useless information), but anyhow, i've referred to it a few times in the past & found it helpful. Cheers.

This year IRS guarantees to accept 100% of all income tax extension filed