Annuity

[Gary]

I have a client that wants to take money from an IRA and purchase an annuity. Am I correct in telling them that for this to be a tax-free event, the annuity must be in an IRA?

Gary

[AZ-Tax]

The only way I know for this to be a tax free event is to

I have a client that wants to take money from an IRA and purchase an annuity. Am I correct in telling them that for this to be a tax-free event, the annuity must be in an IRA? Gary

do a custodian transfer to another custodian transfer and remain an IRA.

Gary, hopefully you are licensed to sell fixed annuities for if you are and a fixed annuity if what your client desires, you probably make much more on commissions then your tax prep fee.

[S T]

IRA to Annuity

Yes, he can rollover his IRA to an Annuity that is "classified as a Rollover IRA or qualified IRA"
I always recommend that it is a "Direct Rollover" from Company A to Company B - Most Annuity Companies (Insurance Cos) have a form to complete the transfer.

Sandy