MG wrote:
- quote -

"Joint Owners" is an insufficient definition. There are a number of
forms of Joint Ownership. If your Mother is a Joint Owner, then she
may be able to act WITHOUT your acquiecense. Therefore, after
she reaches age 59 1/2, she could make withdrawal's from the
Annuity, some or all of which might be INCOME Taxable..

The term "Annuitant" refers ONLY to the person upon whose life
the Annuity was based. Only the Annuitant can elect to receive
an ANNUITY (income). It has no effect on the taxability of any
money received by an OWNER.

- quote -

You should relly consult a practicing CPA for Income Tax
Liability. However, IMHO, as I stated before, as ANNUITANT,
you should NOT be taxed, IF the Owner takes out the money.

- quote -

Almost ZERO amount of Risk for any funds LEFT in the
Annuity. The only risk that you take is the functionality of
the Carrier. If they have done well for the past 5 years, I
do believe that you could rely on them for the next few.

Cal Lester CLU

--
I tried sniffing Coke once, but the ice cubes got stuck in my nose

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Written by jeroen[at]vanbaarsel.net

My mother set up a 5-year non-qualified annuity with American General
in 1998. I'm listed as the "annuitant" while we're both joint owners.
The annuity just matured and we're trying to figure out what our
options are.

Unfortunately we weren't aware of the tax consequences when the
annuity was set up. From what I understand, if I take the money out
now, the IRS will impose a 10% early withdrawal penalty on top of the
ordinary income tax because I'm under 59 1/2. My mother will turn 59
1/2 in May 2004. I spoke to a rep and was told that if I transfer
full ownership to my mother and she withdraws next May, the penalty
can be avoided, but I (annuitant) will be responsible for the tax.

My questions:
- Is this transfer of ownership our best/only option?
- If so, does it matter when the transfer occurs?
- If she withdraws as full owner and gives me a portion, is this
considered a taxable gift? (Even though I'm still the annuitant.)
- Is there a way to change who is respsonsible for the tax?
- How much risk do annuities generally carry? (i.e. If we leave the
money for another year, is there much risk of losing the principal?)

Thanks in advance,
Mike