Level 3

annunity gift to child

Forum|Forum|2 years ago
May 5, 2024
2 replies
11 views

What is the tax effect on someone gifting a non qualified annuity to child? gifter is 70+ years old and child is 50+ years old. Can this be done by adding a rider (child) to annunity then change annunity to payout phase by taking one payment. Then change ownership to child. The child would have lifetime income and only pay income taxes on the gain of each payment of the annunity. Let me know.

qbteachmt

Level 15

Are you asking about this as beneficiary, or as annuitant? What does the insurance broker tell them, and did you confirm that part independently?

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dperhoganAuthor

Level 3

As annuitant, I found the scenario online and wanted to find out if this is possible. My client hasn't asked insurance broker. I believe this type of transaction falls under a 1035 exchange but don't know if my scenario is possible. Reaching out to find the best option.

qbteachmt

Level 15

That's not Gifting, then. An annuity has an Owner, an Annuitant, and a Beneficiary. You want to read on Transfer, and it will also depend on the contract (if it has this provision) and if it has already been paying out or not.

Google:

transfer nonqualified annuity to new annuitant

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