Description: The article analyzes Private Letter Ruling 202031008, which considers how Internal Revenue Code sections 72(q) and (u) apply to an annuity contract issued to a trust. In particular, the Ruling interprets the terms “taxpayer,” “holder” and “held by” in those Code sections in situations where a non-qualified deferred annuity contract is issued to a grantor trust or a non-grantor trust. The Ruling’s analysis and conclusions differ in some respects depending on which of these types of trusts is involved. In addition, although the Ruling does not address sections 72(s) or 72(e)(4)(C), the Ruling has potential implications under those provisions because they also use the term “holder” and “holds,” respectively.

Description: Clarification of the tax treatment of non-qualified deferred annuities that are “partially annuitized” is discussed in detail in this article.

Description: A discussion of substantially equal periodic payments, SEPPs, and the penalty tax that is associated with SEPPs, the Recapture Rule. Computation methods are also discussed.

Description: A discussion of tail-design LTC riders for annuities and how contract cash values are offset by reductions to the annuity contract. LTC benefits, and how they relate to the annuity contracts, are also discussed.

Description: Articles on IRS private letter rulings on combination products, IRS treatment of reinsurance under section 845, and IRS waivers for failed contracts under section 7702.

Description: The rules governing the tax treatment of distributions from life insurance or annuity contracts are complex. Worse, the relevant IRC section, section 72, seems at times to be the product of a conspiracy in restraint of understanding.

Description: Provides in-depth discussion of IRS Rev. Proc. 2008-24, including tax background of partial annuity exchanges. Then discusses partial annuitizations and “modified endowment contracts.”