dmertz
Level 15

Retirement tax questions

I assume that this is a distribution from a nonqualified annuity (codes 1 and D in box 7 of the Form 1099-R).  If you previously took no distributions from this annuity, I would have expected the taxable amount to be slightly over $2,000, the entire amount of interest earned.  As JulieS said, non-periodic distributions from a nonqualified annuities come first from investment gains.  Only after all of the gains present in the account have been distributed do the distributions include a portion of your investment in the contract.

 

Periodic (annuitized) distributions are different in that they include only part of your gains.