Nationwide Insurance sent us a 1099R with box 1 showing $10,500 (Gross Distribution), box 2a showing $10,500 Taxable amount! Also, box 9b is left blank (not showing our $100,000 Contribution)!
I called them and asked why none of our initial investiment of $100,000 is used to reduce the taxable amount in box 2a. Their response was they use Last in/First our and not the exclusion Percentage that IRS Pub 575 does.
Was I right in telling them they had to reduce the taxable amount in box 2a by calculating the exclusion % using the table VI (both my age and my wife's age) per "THE GENERAL RULE"?
If possible, please cite any other items in Pub575 or US Code I can use when they call me back.
This has become very frustrating for us since we thought Nationwide knew the tax laws concerning self funded non qualified joint suvivor annuities!
Thank you for the help.
