Client age 63 wants to take a one-time partial withdrawal from a non-qualified annuity. The present annuity contract value exceeds basis by more than the proposed withdrawal. I seem to remember that all withdrawals from a NQ annuity in excess of basis are considered to be 100% taxable until the current annuity contract value equals basis. Is that correct?
Note: I realize there are a host of other issues - surrender charges, how the contract is invested, etc. We have those issues covered. What we are curious about is the income tax consequence on the partial lump-sum withdrawal. Thanks.
-HW "Skip" Weldon Columbia, SC
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