547. In the case of a refund or period-certain annuity, is the balance of the guaranteed amount, payable after annuitant’s death, includable in the annuitant’s gross estate?Nuco Employeercline202015-04-28T21:05:00Z2015-04-28T21:05:00Z12641505Summit Business Media123176614Site Map/Annuities/Estate Taxation/Nonqualified/In GeneralSite Map/Transfer Taxation/Federal Estate Taxation/Annuities/Nonqualified/In General2005-01-24T00:00:00ZTaxFactsDefaultArticle117570604-00-tf1.xml604.00;#1558;#2318;#0x010100C568DB52D9D0A14D9B2FDCC96666E9F2007948130EC3DB064584E219954237AF3900242457EFB8B24247815D688C526CD44D009C4E67E972694125ABDA91AC61F5E51FTax Facts 1In the case of a refund or period certain annuity, is the balance of the guaranteed amount, payable after annuitant’s death, includable in the annuitant’s gross estate?115700.000000000TaxFactsDefaultArticleSBMEDIA\moss-admin2010-01-15T00:41:53Z547. In the case of a refund or period-certain annuity, is the balance of the guaranteed amount, payable after annuitant’s death, includable in the owner’s gross estate?If payable to the owner’s estate, it is includable in his gross estate under IRC Section 2033, as a property interest owned by him at death. If payable to a named beneficiary, and the owner purchased the contract (after March 3, 1931), it is includable in the owner’s gross estate under IRC Section 2039(a). It is immaterial whether the beneficiary designation was revocable or irrevocable. If the refund beneficiary is a charitable organization, the value is included in the owner’s estate, but the estate is also entitled to a charitable deduction for the value of the transfer to the charitable organization..IRC Sec. 2055. However, where a decedent has directed his executor to purchase a refund annuity for a personal beneficiary and to name a charitable organization as a refund beneficiary, the decedent’s estate is not entitled to a charitable deduction for the value of the refund..Treas. Reg. §20.2055-2(b); Choffin’s Est. v. U.S., 222 F. Supp. 34 (S.D. Fla. 1963).PLANNING POINT: It is important to understand that the tax liability on distributions from an annuity accrue to the owner of the contract, even when the owner is not the annuitant. If A owns either an immediate or deferred annuity, of which B is the annuitant, all tax liability (estate and income) is that of the owner. At the annuitant’s death, any value remaining in the contract, for both income and estate tax purposes, is taxable to the owner.If the owner and annuitant are the same individual, much confusion as to tax liability can be avoided. Before recommending that the owner and beneficiary be different parties, the tax implications should be thoroughly understood. – John L. Olsen, CLU, ChFC, AEP