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My grandmother is a retired teacher and has two annunities. A unqualified annunity and a qualified 403(b). She is 74 years old and wants to start taking the money out. I advised her not to do a lump distribution because of the taxes and Alternative Minimum Taxes. The minimum distributions are 10yrs (unqualified) and 5yrs (403B).

She wants the money to go to her childern and grandchildren. But doesn't want us to pay estate taxes, which is why she decided on taking the distributions now. What is the best way to get the money out of the annunity? Will the gains be subject to capital gain taxes or ordinary income? Any information would be helpful. Thanks
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