- 2,584
Hello,
I posted the excerpt below of what the rule is for someone that takes a prior to age 59.5 early withdrawl from a NQ annuity and the contributions to the annuity were all prior to 8/14/82 ( Pre TEFRA ) NQ annuity.
The question is:
Is all of the withdrawl NOT subject to the 10% penalty as all of the gain came from the contributions that were made Pre TEFRA, 8/14/82 ?
I would say yes to that question. I am getting confused with the word "attributable" and "allocable".
Confirming it means if the money was put in prior to 8/14/82 Pre TEFRA, if you withdraw it today, no 10% penalty because all gains made up until today, came from the Pre TEFRA contribution.
Payments allocable to investment in the contract before August 14, 1982, including any income accumulated on the investment. The tax law allocates payments to pre–August 14, 1982, investment before allocating them to post–August 13, 1982, investment.
The 10% penalty tax generally applies to the taxable amount of distributions from annuities made before the owner attains age 59½. However, there are exceptions for distributions:
(4) attributable to investment in the annuity made prior to 8/14/82.
I posted the excerpt below of what the rule is for someone that takes a prior to age 59.5 early withdrawl from a NQ annuity and the contributions to the annuity were all prior to 8/14/82 ( Pre TEFRA ) NQ annuity.
The question is:
Is all of the withdrawl NOT subject to the 10% penalty as all of the gain came from the contributions that were made Pre TEFRA, 8/14/82 ?
I would say yes to that question. I am getting confused with the word "attributable" and "allocable".
Confirming it means if the money was put in prior to 8/14/82 Pre TEFRA, if you withdraw it today, no 10% penalty because all gains made up until today, came from the Pre TEFRA contribution.
Payments allocable to investment in the contract before August 14, 1982, including any income accumulated on the investment. The tax law allocates payments to pre–August 14, 1982, investment before allocating them to post–August 13, 1982, investment.
The 10% penalty tax generally applies to the taxable amount of distributions from annuities made before the owner attains age 59½. However, there are exceptions for distributions:
(4) attributable to investment in the annuity made prior to 8/14/82.
