Tag Archives: AN

Annuity

Annuity

Annuity means:
a contract or agreement sold by commercial insurance companies that pays a monthly (or quarterly, semiannual, or annual) income benefit for the life of a person (the annuitant), for the lives of two or more persons, or for another specified period of time. No income is recognized as the cash value of the annuity increases. When payments are finally received, the amount is apportioned between the recovery of capital and income based on the following exclusion formula: investment cost /expected return x annuity payment = exclusion amount The difference between the annuity payment and the exclusion amount is taxable income. Once the investment in the contract is recovered, all other payments are taxable. Former IRC (check if this IRC provision is current here) §§ 72 and 1035(b)(2).

Description and Definition of Annuity

An annuity is an annual payment of money by a company or individual to a person called the annuitant. The payment is for a fixed period or the life of the annuitant. The payments you receive include the return of your investment in the contract plus interest or other return on your invested capital.

Resources

See Also

Further Reading

Annualized Income Installment Method

Annualized Income Installment Method

Annualized Income Installment Method means:
a method used to calculate an individual taxpayer's required quarterly estimated tax payment when income is not received evenly throughout the year. The payment for each quarter is calculated using the cumulative taxable income through that quarter. The cumulative amount is annualized to estimate 1 year's worth of taxable income. The annualized tax amount is then multiplied by the applicable percentage for the quarter to calculate the tax due year-to-date, as follows: First quarter 1/1-3/31 22.5% Second quarter 1/1-5/31 45.0% Third quarter 1/1-8/31 67.5% Fourth quarter 1/1-12/31 90.0% Any prior payments made are then subtracted to arrive at the payment due for that quarter.

Description and Definition of Annualized Income Installment Method

The Annualized Income Installment Method is a method used to figure the required estimated tax payments when the taxpayer does not receive income evenly throughout the year. Under this method, the taxpayer bases each quarter's estimated tax payment on what his income would be for the entire year if he continued to earn at the rate he has so far.

Resources

See Also

Further Reading

Annuities

Annuities

General Rule for Pensions and Annuities, I.R.S Pub. 939 Issue

You may find information about General Rule for Pensions and Annuities, I.R.S Pub. 939 in this Tax Platform of the American Encyclopedia of Law.

Announcements

Announcements

Announcements “. . . alert taxpayers to a variety of information but do not have the formality of notices, revenue rulings, or revenue procedures. They constitute authority for avoiding the substantial understatement penalty” [under I.R.C. § 6662]. Gail Richmond, Federal Tax Research: Guide to Materials and Techniques, p. 95 (5th ed. 1997)(Foundation Press). “[Notices and Announcements] may . . . contain substantive guidance regarding the tax laws or contain guidance to taxpayers of a procedural nature. Generally, Notices and Announcements are used when expeditious guidance is needed. Since Notices and Announcements that contain substantive or procedural guidance are intended to be relied on by taxpayers, they are the equivalent of revenue rulings and revenue procedures . . . .” Rev. Rul. 87-138, 1987-2 C.B. 287.

Overview

An announcement is a public pronouncement that has only immediate or short-term value. For example, announcements can be used to summarize the law or regulations without making any substantive interpretation; to state what regulations will say when they are certain to be published in the immediate future; or to notify taxpayers of the existence of an approaching deadline.
Access IRS Announcements

1990s 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
2000s 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
2010s 2010 2011
Other Sources for IRS Announcements

Other IRS Announcements are not yet available on TaxAlmanac, but can be found on the following external site(s):

IRS early drop scan for “a-XX-YY” where XX is the last two digits of the year.

Anti-churning Rules

Anti-churning Rules

Anti-churning Rules are.

depreciation or amortization rules that prevent the sale and repurchase (churning) of assets acquired before 1981 into accelerated cost recovery system (ACRS) property (or, before 1987 into modified accelerated cost recovery system (MACRS) property) in order to obtain more favorable depreciation deductions. Generally, if property was acquired after 1980 (or after 1986 for MACRS treatment), and it was: 1. owned or used by the taxpayer or a related party during 1980 (1986 for MACRS), 2. acquired from the taxpayer who owned it during 1980 (1986 for MACRS), and the user of the property remains the same, 3. leased by the taxpayer to a person who owned or used it during 1980 (1986 for MACRS), or.

4. not ACRS or MACRS property in the hands of the previous owner, and the user of the property does not change, then the taxpayer is precluded from using more favorable ACRS (or MACRS) depreciation. Anti-churning rules also prevent taxpayers from amortizing goodwill and other intangibles.

See Depreciation in the United States Encyclopedia of Law and Depreciation in the World Encyclopedia of Law.