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?

Answer: Yes.

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.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.