Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Regulation and Compliance > Federal Regulation > IRS

IRS Eases Up On Withdrawals Linked To Annuity Exchanges

Your article was successfully shared with the contacts you provided.

The Internal Revenue Service is changing the way it treats annuity withdrawals that follow partial exchanges of assets from one annuity to another.

The IRS will reduce the period it considers when deciding whether a taxpayer made a partial exchange to avoid taxes on a withdrawal to 12 months, from 24 months, officials write today in IRS Revenue Procedure 2008-24.

The IRS originally set the 24-month consideration period in IRS Notice 2003-51.

The 2003 notice permitted the taxpayer to escape penalties if the taxpayer could show that the partial exchange was the result of a divorce, loss of employment or other major life event, and that a surrender of one of the annuities or withdrawal from one of the annuities was not contemplated at the time of the partial exchange, officials write.

In addition to shortening the exchange review period, the IRS also will remove the requirements relating to the taxpayer’s motives for making the partial annuity exchange, officials write.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.