1040 Reporting of Deferred Fixed Annuity Purchase

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  • #74551
    agawam27
    Participant

    1. I purchased a Fidelity Deferred Fixed Annuity in 2021 with pre-tax funds from my Fidelity IRA. My understanding is that the IRA distribution to purchase the annuity is considered a direct transfer/rollover of IRA funds into the (qualified?) Deferred Fixed Annuity account and is not a taxable event.

    —Does that sound right?
    —Also, if the annuity purchase is a non-taxable event, should this be reported only on 1040 line 4a (IRA Distributions) or only on 1040 line 5a (Pensions and Annuities)?

    2. When this Deferred Fixed Annuity matures, my understanding is that I can have the entire annuity and earned income transferred back into my Fidelity IRA and again, it would not be a taxable event.

    -Where on my 1040 should I report the transfer of this Deferred Fixed Annuity back into my Fidelity IRA?

    Thank you!

    • This topic was modified 1 month ago by agawam27.
    #74697
    Alan S.
    Participant

    1) Most likely, the IRA annuity was purchased using a non reportable same trustee transfer between Fidelity IRAs. If so, there will be no 1099R or 5498 issued and you will not have to report this transfer anywhere on your 1040.

    2) That is correct. Same as above, this would be a non reportable same trustee transfer when it occurs. There is no limit on the number of these transfers you can make. And if you are subject to RMDs, these transfers are disregarded with respect to your RMD timing.

    #74698
    agawam27
    Participant

    Thank you Alan!

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