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Annuity Legislation -
Effective Date Chart |
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| Rule |
Effective Date |
| Cost basis stepped up to the value of contract at time of owner’s death |
October 21, 1979 – variable annuity contracts issued from this date on do not receive a step-up in basis at owner’s death. Any gain is taxable to the beneficiary. |
| Basic taxation on withdrawal (income first) |
August 14, 1982 – any investment made on or after that date in an annuity contract, regardless of when the contract was issued. |
| 10% penalty on premature distributions |
January 18, 1985 – contracts issued after that date |
| Death of the holder (owner) |
January 18, 1985 – contracts issued thereafter |
| "Non-natural person" rule |
February 28, 1986 – contributions made after that date, regardless of when annuity was issued. |
| Death of "any" holder |
April 22, 1987 – for contracts issued after this date, death of one joint owner forces distribution even if another owner survives. |
| Gift of annuity |
April 22, 1987 – contracts issued thereafter |
| Multiple contracts treated as one |
October 21, 1988 – non-qualified contracts issued after this date by the same company to the same owner during any calendar year are treated as one contract for the purpose of determining taxable withdrawals. |
Features will vary by company and product. Please refer to
Glossary for definitions
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