517. What distributions are required when the owner of an annuity contract dies before the entire interest in the contract has been distributed?Stevenrcline202015-04-28T20:30:00Z2015-04-28T20:30:00Z12121213Summit Business Media102142314Site Map/Annuities/Nonqualified/Death/Owner2005-01-19T00:00:00ZTaxFactsDefaultArticleEthics in Deferred Annuity Sales.pdfEthics in Deferred Annuity Sales.pdf10037-00-TF1.xml37.00;#1587;#0x010100C568DB52D9D0A14D9B2FDCC96666E9F2007948130EC3DB064584E219954237AF3900242457EFB8B24247815D688C526CD44D009C4E67E972694125ABDA91AC61F5E51FTax Facts 1What distributions are required when the owner of an annuity contract dies before the entire interest in the contract has been distributed?129255000.0000000000TaxFactsDefaultArticleSBMEDIA\moss-admin2010-01-14T23:14:21Z517. What distributions are required when the owner of an annuity contract dies before the entire interest in the contract has been distributed?A deferred annuity contract issued after January 18, 1985, will not be treated as an “annuity contract” and taxed under the favorable provisions of IRC Section 72 unless it provides that if any owner dies – on or after the annuity starting date (in other words, when the annuity was in “payout status”) and before the entire interest in the contract has been distributed, the remaining portion will be distributed at least “as rapidly as under the method of distribution being used as of the date of the owner’s death,” and.IRC Sec. 72(s)(1)(A).before the annuity starting date, the entire interest in the contract will be distributed within five years after the owner’s death,.IRC Sec. 72(s)(1)(B). unless either of two exceptions applies allowing for a stretch over a beneficiary’s life expectancy or a continuation in the name of the surviving spouse (see Q 518).In the case of joint owners of a contract issued after April 22, 1987, these distribution requirements are applied at the first death, not the second death.Effect of Exchange on Pre-January 19, 1985 ContractsAccording to the report of the conference committee (TRA ’84), an annuity contract issued after January 18, 1985 in exchange for one issued earlier will be considered a new contract and will be subject to the distribution requirements..H.R. Conf. Rep. No. 98-861 (TRA ’84) reprinted in 1984-3 CB Vol. 2 331-332.