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Posted by Harlan Lunsford on February 18, 2008, 5:59 pm
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Julian wrote:
> I have 3 annuity non-qualified contracts which I bought in 2004. I was
> 61 years old at that time. These are referred to as "safe money"
> contracts. They pay equal monthly installments for 14 years based upon
> what I paid, and I can never get less than I put in, although if stock
> market/value of contracts increases sufficiently in 5 years from the
> date of purchase I could re-up for another 14 years without adding
> additional money. [I have to pay a 1/2 point for this insuarnce
> feature].
>
> Last year i learned that I could recover a prorata portion of my
> investment as a tax free prorata return of my investment, referred to
> as an exclusion. I was unaware of this before because the 1099r didnt
> check off that the taxable amount was unknown and checked that the
> amount paid was the amount taxable. However , I confirmed from three
> separate accountants and some research that a part of what i paid in
> was indeed excludable, as I was in the amortization phase of the
> contract, not the accumulation phase.
> I use a software program to do my taxes.
>
> this year I thought i would check the irs instructions and they advise
> in the 1040 instructions to use the simplified mehtod in the
(balance snipped....)
the very first thing you should do is to contact the payor to confirm
that it doesn't know what it's doing. The payor should have already
calculated the gross amount and taxable amount, and different figures
should show in those two different boxes on the 1099R.
Have you contacted them already? And if so, what did they say?
ChEAr$,
Harlan Lunsford, EA n LA
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