- 3 - contract with $119,000, retained $10,000 from the $119,000 as a "surrender charge", issued a check in the amount of $109,000 in favor of Equitable, and mailed the check directly to Equitable. Upon receipt of the $109,000 check from Fortis and upon simultaneous receipt of petitioner's application to purchase the Equitable annuity contract, Equitable opened an annuity contract in favor of petitioner with a principal amount invested of $109,000. The record does not indicate when payments under the Equitable annuity contract were to begin, but the terms and provisions of the annuity contracts are treated by the parties as substantially equivalent. On the application form for purchase of the Equitable annuity contract that petitioner filled out and submitted to representatives of Equitable, petitioner expressly indicated that withdrawal of the funds from the Fortis annuity contract and transfer of the funds to Equitable for purchase of another annuity contract were to be treated as a section 1035 nontaxable exchange. In 1994, Fortis mailed to petitioner and to respondent a Form 1099-R (Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRA's, Insurance Contracts, etc.) indicating that the above transaction was taxable and that $30,535 of the $119,000 withdrawn from petitioner’s Fortis annuity contract represented taxable income to petitioner.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011