ericshor[at]netscape.net (E-Man), you wrote:

<< <I> There was/is a non-qualified annunity that was not in
payout/distribution. The owner passed away and the beneficiaries
chose the 5 year payout option. Now, the financial planner said that
total amount was already taxed as part of filing the estate tax and
therefore there was a stepup in the cost basis to the beneficiaries.
Other postings stated that the beneficiaries still pay tax (as
ordinary income, on the growth) until the original contribution value
was met.

I think I captured the question, any discussion would be useful

BTW - The account disagrees with the financial planner as there are no
tax forms to treat the stepup in cost basis.</i> >
Unless the annuity was inside a retirement plan or some IRA, the financial
planner would be incorrect. So, I would stick to what the accountant says.

Beneficiaries of annuities DON'T get a step up in basis . . . ever. That's one
of the main drawbacks of having an annuity and not using it during one's
lifetime.

Hi All,
First of all, I did try to search the group's postings before
posting this. There were a few good references but I felt a another
posting may not hurt.

There was/is a non-qualified annunity that was not in
payout/distribution. The owner passed away and the beneficiaries
chose the 5 year payout option. Now, the financial planner said that
total amount was already taxed as part of filing the estate tax and
therefore there was a stepup in the cost basis to the beneficiaries.
Other postings stated that the beneficiaries still pay tax (as
ordinary income, on the growth) until the original contribution value
was met.

I think I captured the question, any discussion would be useful

BTW - The account disagrees with the financial planner as there are no
tax forms to treat the stepup in cost basis.

Thanks.
E