[Terri_W]

I took money out of my mutual fund (non ira) and put it in a fixed rate annuity. What tax liability issues are there?

[ebaines]

You report the sale of the mutual fund on schedue D, and either pay capital gains tax on the gain or take a loss, depending on the proceeds you received versus your cost basis. It doesn't matter that you used the money to invest in an annuity.