Home     About Us    Contact Us     Contribute     Privacy
Investing
Stocks
Bonds
Mutual Funds
Biz
Credit
Career
College
Economics
Tax
More
 
 
Marketplace
Related Articles
More
Related Categories
Tip of the Day

Tip of the Day Know When to File your Taxes

Know When to File your Taxes - For those of you who have been doing taxes a long time, you know that when you are expecting a refund you should...

read entire tip

Recently Added
Other Great Sites
 

Inheritance Tax Money

Annuities buyers should be cognizant of the annuity inheritance tax.

"A ruling by a Louisiana appeals court recently stated that the entire death benefit from a single premium annuity plan paid to the beneficiary named in that plan was subject to inheritance tax because it was part of the deceased annuity owner's estate," says annuities specialist Steven Hart. "Since individuals may purchase annuity plans to avoid such taxes, it's important for investors to learn as much as they can about the potential annuity inheritance tax."

In the Lousiana case, a woman's son was the sole heir of her estate. He had also been named as beneficiary for the nonqualified, tax-deferred, single premium annuity plan his mother purchased over her lifetime. The tax collector said the entire death benefit should be subject to the inheritance tax but the son disagreed, insisting that the annuity was equal to a life insurance policy and as a result should not be subjected taxes. The earnings part of the annuity, he said, classified both as "income" earnings and "inheritance" to the beneficiary, created double taxation, which is unconstitutional. The court disagreed and the Appeals Court ruled that proceeds are not like life insurance proceeds and therefore are subject to inheritance tax.

"One of the significant features of a deferred variable annuity plan is that payouts are treated as ordinary income," says Hart. "If the owner of the plan dies before the annuity's beginning date, all of the interest has to be distributed within five years of the individual's death, except when certain conditions apply.

"If a designated beneficiary is the spouse of the annuity owner, at the owner's death, the spouse becomes the owner of the annuity, and no distributions have been made. Therefore, the spouse keeps the deferred status of the plan. If an annuity owner dies during the accumulation phase of the plan, its cash value can be included in the deceased estate if its payable to that estate. If the annuity owner dies after payouts have started, the remained of the annuity contract must be distributed as quickly as the in-force distribution method allows.

"Death benefits from a deferred annuity are considered ordinary income to the beneficiary of that annuity, just as the amounts would have been to the owner of the annuity if he or she had lived. If a lump sum benefit is involved, taxes can be deferred on that amount if the beneficiary chooses to receive a lifetime payout within sixty days of the owner's death."

Discuss It!

research paper writing service said:

Tax is good source for income of government while with the great good jobs competition that is there it has become almost mandatory that people have to do professional development in order for them to maintain their jobs as well as . Therefore if you are still not decides on whether to go form it or not, it is the high time you do it less you end up getting no job or losing the one you have to a better performer.

louis vuitton replica handbags said:

They are top consumers and are accomplished in allotment materials, designs and data so they would accept online writing of top qualities at http://replicahandbags2013.co.uk and bulk for money.

omega replica said:

If a lump sum benefit is involved, taxes can be deferred on that amount if the beneficiary chooses to receive a lifetime payout within sixty days of the owner's death."

the triple play reviews said:

The term inheritance tax and its possibilities are not familiar for common people as it is not included for all. I will be more grateful if you provide the advantages and uses here.

Most Popular Articles
Most Popular Definitions
 
Daily Definition

Definition of the Day Bond Mutual Fund

Bond Mutual Fund - Bond mutual funds often focus on a particular type of bond such as municipal bonds, other government bonds, or corporate bonds. Municipal bonds are not a matter of Federal income taxes. You can steer clear of state taxes if you pick a...

read entire definition

 
 

 

 

Home     About Us    Contact Us     Contribute     Sitemap

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Copyright © 2009 TeenAnalyst.com