IRS approves annuity trust arrangement.(Internal Revenue Service)(Tax Facts & Figures)(Column)

National Underwriter Life & Health-Financial Services Edition, November, 1996 by Chandler, Darlene

The Internal Revenue Service (IRS) has issued a private letter ruling that approves annuity trust arrangement in cases where a trustee holding the annuity for a person is acting as that person' agent. If the trustee holding the annuity for the person is determined not to that person's agent, the annuity contract will not be treated as an annuity for the purposes of tax treatment. This would lead to the annuity's income being taxed on a yearly basis.

A recent private letter ruling looks into the issue of whether a trustee holding an annuity for a natural person is acting as the individual's agent.

The answer to this question is important because if the trustee is found to not be acting as an agent for a natural person the contract is not treated as an annuity...

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