Hi,

I have an annuity (IRA) that was made from my employers rollover. I want to put that in something that has a guaranteed principle, like the 401K rollover CD. I am not sure I can use that as this is not from an employer.


Because of term length required, I ruled out the Roth IRA

My main goal in this type transfer is to avoid the money being taxed?



Thanks

JIm

You can transferr that into another annuity avoding taxes, receives a 5-10 bouns and withdraw up to 10& each yr

You will have to ask whoever sold you the annuity what the penalties might be (if any) for dissolving the annuity and rolling the money into a different investment in your IRA. Quite often there are penalties for withdrawing from an annuity, especially in the first seven years or so.

To be clear - the penalty I'm talking about is one that would be imposed by the annuity investment, not because of any IRA withdrawals. I am assuming here that your annuity is within an IRA account, and so all you want to do is shift your IRA investment from the annuity to something else - correct?

I have some information to add that may help. I decided to surrender the variable annuity and transfer into a bank IRA CD. Yes, Ebaines, it will cost me $1800.00 withdrawal fee but do not mind that at all. One thing I do not like is the time table to get this done. It has been a week tomorrow and the funds are still not transferred. Did they put a hold on them OH NO, why, so the funds could take all the hits this week. When they first got the notice seems like a hold should have been put on the annuity??


My big question is this. With rolling into a IRA CD if I have read correctly I can not claim any losses at tax time



Thanks so much for any input.


JIM

Quote:

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Originally Posted by Jbert

My big question is this. With rolling into a IRA CD if I have read correctly I can not claim any losses at tax time

JIM

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Correct - your losses on the annuity can't be taken as losses on your income taxes, for two reasons: first, because it's inside your IRA (a tax-sheltered account) and second, even if the anniuty was not in your IRA you can't deduct such losses because its considered a personal loss, not an investment loss. Same thing would apply, for example, to a loss you might have in a variable life insurance policy - you can't deduct it on your taxes, except to the extent that it might offset a gain in another policy. Sort of like how they treat gambling winnings and losses.

Thanks Ebaines. I figured that also. BUT I did read if one cashes out and reports amount as income then he/she can claim the loss. I would rather roll your over.


Thanks again