My father died in 2018. As a result, an annuity within his traditional IRA was cashed out and the proceeds retained within the IRA. The IRA is going to the surviving spouse, which happened in 2019, but that is not my issue.
The 1099R from the issuing insurance company shows this as a 7D, normal distribution of "an annuity payment of a non-qualified plan that may be subject to tax." The "taxable amount" in box 2a is the gain above the purchase price.
Do I report this gain as taxable, or do I make an adjustment for it? And if it can be deferred since it's within the IRA, how do I do this within Turbo Tax?
Since all the proceeds were paid directly to the broker who placed it back within the IRA, it seems that taxes would be paid twice if taxed this year and then his spouse has to pay again when the IRA is distributed. Hope this makes sense.
Thank you for any help.
