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Tax on inherited annunities
My mother died and left three annunities (non qualified). I am the thrustee responsible for distribution. I have asked two qualified tax people about tax ramifications regarding these annunities. One tax person told me we are only liable (taxwise) for the amount of income accrued since her death. The other tax guy says we are taxed on all income accured over the six years since the annunity was "opened". My deceased mother has NOT taken any withdrawals out of these annunities. Her total estate is under 2 million. How will we be taxed?
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I am afraid I agree with the second opinion. All income accrued will be taxed to the beneficiaries once the annuities are cashed in. The beneficiaries generally have a few options related to the timing of receiving the annuities which could prove beneficial and should be reviewed (assuming the annuities have not already been cashed). You may want to go back to the 2nd tax guy and review these rules as it seems he understands what is going on. |
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