Because box 2b Taxable amount not determined is marked, you must calculate and enter the taxable amount yourself.
If in the past box 2a had the same amount as was in box 1, the box 2a amount on this Form 1099-R should be the same as the amount in box 1.
Otherwise, the amount in boxes 2a and 5 should generally be reduced from the amounts shown in past years by the same proportion as the amount in box 1 was reduced. However, you'll also need to determine when all of your original investment in the contract has been paid back to you. Once that has happened, everything else reported in box 1 of the Form 1099-R for the year in which this happens and all future Forms 1099-R will be taxable.
You can use the Simplified Method to come up with the same results, but it would require some modification due to the splitting of the annuity. You would have to reduce by the same proportion as your reduction in payments the amounts representing your investment in the contract and the amount previously received.
I would use the Simplified Method to do the calculation for your tax return and use the first method I suggested to verify that you made the correct entries for the Simplified Method.
Your ex-wife will need to do the same when dealing with her Form 1099-R from this annuity. The sum of her results and your results should be the same as what you previous Forms 1099-Rs showed.
