How Are Annuities Taxed?

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   Brandon Roberts

   Owner, The Insurance Pro Blog,

   Annuities are taxed as ordinary income for any gain withdrawn from the policy. 
   
   Annuities use the Last in Last out (LIFO) accounting basis for withdrawals meaning any gain in the policy must be withdrawn first before any basis in the policy can be withdrawn.

   Answered on September 1, 2013

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