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Russ asks:

<<Since this annuity is inherited, there wouldn't be any withdrawal penalties to the beneficiary, would there? Wouldn't there only be taxes on the gains?>>

Yes, you are correct. Just like in an inherited IRA, there will be no penalty to a beneficiary who takes a distribution from an inherited annuity prior to reaching age 59 1/2, just ordinary income taxes on any gain over the decedent's basis in that annuity.

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