IRS approves tax-free exchange of annuity contracts by post-death beneficiary

Insurance Tax Bulletin

In PLR 201330016, the IRS concluded that the post-death beneficiary of five annuity contracts could exchange the value of those contracts tax-free pursuant to Section 1035(a)(3) for a new annuity contract offering higher payouts. The ruling represents the first time the IRS has considered the application of Section 1035 to a contract held by a post-death beneficiary who is currently receiving distributions required by Section 72(s).



Return to Tax research and insights
Insurance Tax Bulletin newsletter archive