hey guys...unfortunately (well fortunately) i am the beneficiary on some annuities of a relative...the easiest option is to take the lump sum but i don't really want to pay taxes on them..does anyone know of a legit way to avoid paying taxes on the amount? maybe not legit? thanks

 

Check with your accountant, all you may have to do is declare them and not pay taxes on them. When my parents died all I had to do was declare the monies and ended up with no tax liability.

 

So, how much?

 

Not sure how, but I'm fairly certain you can roll those funds into a qualified plan. I'm not sure, but I think this may be similar to what happens in an Inherited IRA... Check with an accountant or financial planner that you trust.

 

Yea, I think you're on the hook for some taxes.

whether it is an estate tax or personal income tax is a ?

I believe only insurance payouts are tax free.

 

Insurance payouts FTW!

 

Annuities are taxable, amount received over the invested amount. Unless it's an annuity in an IRA account, it can't be rolled over. And the insurance company will give you a 1099 which is also filed with the IRS so no way around it. However, the 1099's are very often wrong. I believe, from years of experience, the insurance companies do this on purpose. So don't trust the 1099 to compute your taxable amount. Let your CPA/tax preparer help.