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    Tom Wasmer's Avatar
    Tom Wasmer Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Jul 9, 2008, 08:27 AM
    Annuity taxes
    I inherited a non-qualified annuity from my parents.
    Am I taxed on the interest earned on the annuity or on the full amount of the annuity?
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Jul 9, 2008, 10:11 AM
    The difference between what you receive and what your parents invested is taxable income.
    Thus
    *the money you receive is fully taxable until you have withdrawn all of the earnings. After that, all withdrawals would be tax-free, or
    * for each payment received a part is taxable and a part (return of capital) is tax free.
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