"Robert McLure" <robertmclure[at]comcast.net> wrote:

- quote -

I can't tell from what you post here, I'd need LOTs more
info. But I will offer some other information that may help
you figure it out.

If you surrender an annuity during the Contingent Deferred
Sales Charge, or CDSC, period a surrender charge can apply.
The annuity company gets to keep this money as a fee for
letting you out early. This amount is included in your
gross distribution and is taxable to you even though you
never get the money.

There may also be a difference in the value of what you
actually got if there was a change in the market values
between the date of the statement you reference and the date
they actually liquidated your investment in the contract.

I'd recommend you call Penn Mutual and ask them, I'm sure
they can explain it to you.

Gene E. Utterback, EA

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

"Robert McLure" <robertmclure[at]comcast.net> wrote:

- quote -

You paid WITHHOLDING, NOT the penalty. The withdrawal
charge is not a tax issue, it's an investment issue.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I've gotten plenty of great advice in this forum and hope
you all can help me out once again.

I surrendered an annuity last year and just got my 1099-R
from the institution. I don't think the numbers are
correct, as they don't seem to make sense when compared to
the check stub numbers. Hopefully someone can explain.

The 1099-R indicates Gross Distribution of $33198.92 and
Federal income tax withheld of $3319.90. The check stub for
the disbursement indicated Gross Amount of $30,731.44 with
Penalties of $2119.38 and Federal tax of $2861.21, for a Net
amount of $25,750.85 for the full surrender of the annuity.

The last statement that I have indicates a Full Withdrawl of
$30,731.44 with a withdrawl charge of $2119.38, leaving a
Net withdrawl of $28,612.06. If you apply a 10% penalty to
that, you get the net amount of $25,750.85

I know that I was going to get the 10% penalty and pay
taxes, but are these numbers correct? The gross amounts are
confusing me. The annuity was a Penn Mutual Olympia XT.

Am I being assessed the 10% penalty twice??

TIA,
Bobby

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->