[Jbert]

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

[maxis]

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

[ebaines]

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?

[Jbert]

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

[ebaines]

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

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.

[Jbert]

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