Ask the Experts!
The professionals at Advanced Underwriting Consultants (AUC) answer the tax and technical questions posed by producers. Here’s the question of the day.
Question: My client is getting divorced, and one of couple’s most valuable assets is a nonqualified annuity titled in the name of the wife. Can part of that annuity be transferred to the husband without an income tax result?
Internal Revenue Code Section 1041 says that annuities—or any other assets, for that matter—can be transferred between ex-spouses pursuant to a divorce without an income tax result.
A transfer is considered to be pursuant to a divorce if it
· occurs within 1 year after the date on which the marriage ends, or
· is related to the dissolution of the marriage.
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