dmertz
Level 15

Retirement tax questions

As Opus 17 said, a nonqualified annuity is not permitted to be "rolled over."  Nonqualified annuities can only be moved by performing a Section 135 exchange which would be reported with code 6 in box 7 of the Form 1099-R.  However, the codes 4 and D indicate that this was an inherited nonqualified annuity.  It's doubtful that an inherited annuity is permitted to be moved by Section 1035 exchange at all.

 

The code 4D indicates that the original annuity was cashed out, subject to taxation of the amount in excess of the investment in the contract.  The purchase of the new annuity is a completely independent transaction and the premium paid for the new annuity is the investment in that new, unrelated contract.