This weekend I visited my family back in Cincinnati and got to meet my Dadâs new iPad for the first time. I donât have enough money for this fancy technology so Iâve never really used an iPad before.
Deferred Annuities. A deferred annuity grows tax deferred until the contract is annuitized (put into a payment stream) or surrendered (paid out as a lump sum). This type of annuity is a vehicle for accumulating savings for a future goal, such as retirement, and eventually distributing the value.
An annuity owner who is a ânatural personâ will pay no income tax until he or she receives distributions from the contract. If the contract is annuitized, taxation of payments will be calculated based on the rules that apply given the annuity starting date when payments begin. The tax deferral enjoyed by a deferred annuity owned by a natural person is not derived from any specific IRC section granting such deferral. Rather, this tax treatment is granted by implication.