A heavily promoted, but controversial technique for income and estate tax planning has been the so-called "private annuity
A high level of cooperation this past year among regulators and the annuity
industry, particularly with regard to equity-indexed annuities, has helped the situation.
Gross income includes any amount received as an annuity
under an annuity
contract [IRC Sec.
The downside to this is that the amount invested in the annuity
declines when the stock market declines.
The estate used that amount on its return; however, the IRS determined, based on the annuity
valuation tables, that the value of the remaining payments was $1,091,553.
ii) Any other person only when the person sells, solicits, advertises, or offers an insurance product or annuity
to a consumer at an office of the bank or on behalf of a bank.
Advisers, however, now face new decisions about which annuity
features and benefits to use, if any.
deferred: An immediate annuity
provides payment of benefits immediately on funding.
In June 2002, Bracey, 52, purchased The Best of America variable annuity
from Nationwide Insurance Co.
However, because Medicaid requires full disclosure of certain recent gifts, and because other problems can occur (for example, gift tax), many clients may be better off creating a private annuity
to shed excess wealth.
If he can't explain a variable annuity
to someone before the end of the ride, he's not doing a good job.
A grantor retained annuity
trust (GRAT) is an irrevocable trust to which a grantor transfers property in exchange for the right to receive a fixed annuity
for either a set number of years or for life.
But whether an annuity
is right for you depends on your investment goals and your age.