1099R For Non-qualified Annuity

Home Fairmark Forum Retirement Savings and Benefits 1099R For Non-qualified Annuity

Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • #5212
    kaneohe
    Participant

    I have a non-qualified annuity with Pre-TEFRA basis. In 2019 I removed an amount equal to that Pre-TEFRA basis so I could deal with the consequences while I am still on this earth. The first line reps at this company didn’t sound like they knew much this and they made it sound like it would be taxable. I finally got them to find someone who knew more who acknowledged that the withdrawal would not be taxable.

    I have not received a 1099R yet and when I called in and talk to a first line rep, he said he did not see a 1099R and said it was because it was not taxable (progress!). I expected a 1099R showing the withdrawal but no taxable amount. What code would be used in Box 7 (I assume the IRA box would not be checked)? I couldn’t find anything related to pre-TEFRA basis for coding.

    Or are they correct that a 1099R is not needed?

    #5213
    kaneohe
    Participant

    https://www.lfg.com/wcs-static/pdf/IRS%20Form%201099-R%20FAQ.pdf

    ” The other distributions that did not include any taxable gain and are considered return of cost basis would have only a numeric distribution code in Box 7″

    This link suggests that I should get a 1099R with code 7 in box 7 with
    distribution and 0 taxable amount in appropriate boxes?

    #5214
    kaneohe
    Participant

    I talked to a supervisor who got a more experienced rep who says they normally do not issue a 1099R when the distribution is not taxable.
    Looking for a tie-breaker.

    #5216
    Alan S.
    Participant

    The 1099 R instructions call for a 1099R, in your situation a code 7 1099R with Box 1 and Box 5 equal amounts. However, if they don’t issue one they might have received some general exemption from the IRS in certain cases, so I would not worry about it, other than to have some other method of keeping track that you have received your pre TEFRA investment back.

    #5217
    kaneohe
    Participant

    Thanks, appreciate the help,Alan.

    #7231
    Lewis-H
    Participant

    Your non-qualified annuity is funded with after-tax funds, which make up the cost basis portion of your annuity. If your distributions are 100% cost basis, then the taxable amount of the distribution is $0.00, then Box 2a of your Form 1099-R will be blank.

Viewing 6 posts - 1 through 6 (of 6 total)
  • You must be logged in to reply to this topic.