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Author: Arniefl Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121108  
Subject: Variable annunity losses Date: 8/24/2005 10:27 PM
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How are losses taken on your 1040 for a qualified variable that has been completly redeemed. There is no annuity now and all of the money is out.
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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 80513 of 121108
Subject: Re: Variable annunity losses Date: 8/24/2005 11:16 PM
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How are losses taken on your 1040 for a qualified variable that has been completly redeemed. There is no annuity now and all of the money is out.
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That's an odd one. It's a miscellaneous itemized deduction. Whether it is subject to the 2% floor is a matter of some debate, based on the technical reading of Code section 165, relating to losses in general.

If the annuity was held by a decedent who didn't live long enough to recover his investment in the annuity, that is clearly not subject to the 2% floor.

The difference is significant, more than just the 2% amount, because if it's NOT subject to the floor, it's also not deductible for AMT purposes.

Bill



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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 80514 of 121108
Subject: Re: Variable annunity losses Date: 8/24/2005 11:20 PM
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Correction: I said it backwards "The difference is significant, more than just the 2% amount, because if it's NOT subject to the floor, it's also not deductible for AMT purposes.

I meant to say, if it IS subject to the floor, it is also not deductible for AMT.(added back on Form 6251)

Sorry. What could be more clear?

Bill


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Author: Mark12547 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 80517 of 121108
Subject: Re: Variable annunity losses Date: 8/25/2005 2:17 PM
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How are losses taken on your 1040 for a qualified variable that has been completely redeemed.

What type of account was it in that made it "qualified"? If it were a 401(k), 403(b), Traditional IRA, or Roth IRA, it would have to follow the rules of that type of account.

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