My father died and left my the sole beneficiary of an annuity in the amount of $30K. do I pay taxes on that? report it as income? how do I treat that?

[Hal_Al · Accepted solution]

Although the general rule is that  inheritances are not taxable; retirement plans, including IRAs, 401ks and annuities are an exception. Since retirement plans are funded, or partially funded, with pretax money, they are taxable or partially taxable when distributed to a beneficiary. The 1099-R will tell you what the taxable amount is. See http://www.investopedia.com/ask/answers/09/inherited-annuity-distribution.asp

[SweetieJean]

Was it a lump sum payment, or will you be getting periodic payments?  Most likely it is at least partially taxable.

In any case, you will get a 1099-R.  Enter it in Wages and Income, Retirement.

[ZoeyDog]

I inherited several annuities this year.  I took the smaller ones as lump sum and withheld taxes.  A larger one, I opted to take the distribution over an extended time (based on my life, but it is not annuitized).  I still received a 1099 R on the entire amount of the annuity - even though it remains at the insurance company as a beneficiary annuity.  I shouldn't be taxed on all the value this year - so how do I show this?  

[Carl]

THe bottom line on your situation is this. Annuities can be set up many different ways. As the beneficiary recipient of the annuity, if anything is taxable, then you will receive a 1099-R showing you the taxable amount in box 2a of the 1099-R. If box 2b is checked instead, then what if any taxes have to be paid, will be determined by how you answer followup questions in the TurboTax program.

So the fact is, there really is no way for anyone (including you) to know if this is taxable or not, until you receive the 1099-R for each annuity you now own.
Now if you haven't received a 1099-R for all of the annuities you now own by Feb 15th, then you should contact the administrator of that specific account and enquire about it. Could be, they don't have the correct mailing address to send the 1099-R to. Not receiving the 1099-R because the sender had the wrong address is "NOT" an acceptable reason for not reporting it, to the IRS either.