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.
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.
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.