Annuity Payout upon Death
My wife's Mother passed in 2020. Her Estate had a number of investments, several of which were Annuities, which were paid out in 2021.
We received the 1099's for several of the Annuities. Both of the Annuities had a tax basis declared in Box 5 of the 1099 we received. However one of the companies listed the Taxable Amount to be the same as the Gross Distribution Box 1. The other 1099 showed the Taxable amount to be reduced by the amount of the amount listed in Box 5 which is the cost basis for the Annuity. I do not understand why the software is not recognizing the Basis amount in Box 5 and reducing the taxable amount in Box 2a?
The second issue is that when the taxable amount is loaded into the software, the tax calculated at a 22% rate which is our tax bracket, however our effective tax rate is closer to the 13% range. Why is the software calculating at a higher rate than our effective Tax Rate?
