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Discussion Forum Index --> Tax Questions --> Surrender Charges on Annuity
Tmarroncpa (talk|edits) said:
| 12 April 2006
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| I have a client that incurred surrender charges on early withdrawal of an annuity. Is this deductable as an investment expense or as penalty on early withdrawal? There is no 1099 relating to this.
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Dennis (talk|edits) said:
| 13 April 2006
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| no 1099? he probably got back less than he put in. Misc. deduction for loss (subject to 2%)
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Tmarroncpa (talk|edits) said:
| 13 April 2006
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| Yes, he did. Thanks, I was going to take it as an investment expense. I assume that's what you mean. The IRS couldn't even tell me what to do with it! Do you believe that, they actually said "I DONT KNOW". Thanks for the input, I'll go with that then.
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Dennis (talk|edits) said:
| 13 April 2006
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| not investment expense. just same treatment.
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Benny (talk|edits) said:
| 17 November 2007
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| Is the investment loss, aka surrender charge, subject to the $3000 loss limit and carryover any excessBenny 14:25, 17 November 2007 (CST)Benny
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NYEA (talk|edits) said:
| 17 November 2007
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| Loss on the surrender of the annuity is ordinary - see Rev Ruling 61-201
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Dennis (talk|edits) said:
| 18 November 2007
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| An oldie but a goodie. Unfortunately the law has changed mightily since 1961 and the IRS has specifically taken the other position. You will lose on audit, but you might win in court.
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