24
Feb
Feb
My father born before 1936 had a non-qualifying Annuity (privately purchased). He passed away in Feb of 08. According to his will my 2 brothers and I received a lump-sum pay out from his annuity (each of us received 20k). How do we report the pay out on our tax returns for 2008? Should we file form 4972? Please explain in detail and list any helpful sources.
I’m asking because I feel my tax preparer did it incorrectly at no fault of his own but due to lack of experience with this sort of situation.
Answer:
You should receive a form 1099-R to report the income. List it as annuity income on line 16 of your 1040. You do NOT have to pay any of the tax penalties for early distributions, and you do not have to file 4972. In the event you paid an estate tax, that portion of the tax that was taxation of the annuity payment might be deducted on Schedule A.
Answer:
The form 4972 is for pension plans, not private annuities.
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