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jedenning01
New Member

Closed an annuity to roll entire amount to brokerage account. I did NOT receive any of the money. Is this event taxable? On the 1099, distrib code is 7D, 2A is blank

If taxable, does the question become what is the basis?

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DDollar
Level 4

Closed an annuity to roll entire amount to brokerage account. I did NOT receive any of the money. Is this event taxable? On the 1099, distrib code is 7D, 2A is blank

A code D in box 7 indicates that your annuity was non qualified, which means it was not an IRA or other retirement account.  This means that it was a taxable distribution.  The amount that is taxable is the gain - the amount in excess of the amount you put in the annuity.  For non-qualified annuities, a 10% federal tax penalty may apply to the taxable portion of an amount received before age 59½.


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3 Replies
DDollar
Level 4

Closed an annuity to roll entire amount to brokerage account. I did NOT receive any of the money. Is this event taxable? On the 1099, distrib code is 7D, 2A is blank

A code D in box 7 indicates that your annuity was non qualified, which means it was not an IRA or other retirement account.  This means that it was a taxable distribution.  The amount that is taxable is the gain - the amount in excess of the amount you put in the annuity.  For non-qualified annuities, a 10% federal tax penalty may apply to the taxable portion of an amount received before age 59½.


jedenning01
New Member

Closed an annuity to roll entire amount to brokerage account. I did NOT receive any of the money. Is this event taxable? On the 1099, distrib code is 7D, 2A is blank

The annuity was received as a part of a divorce settlement and has lost value since the date it was received.  Would my basis be the value on the date it was received?
DDollar
Level 4

Closed an annuity to roll entire amount to brokerage account. I did NOT receive any of the money. Is this event taxable? On the 1099, distrib code is 7D, 2A is blank

No.  Your basis is the original basis.
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