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Guaranteed Income Rider, Tax Deductible?
Old 10-03-2013, 01:17 PM   #1
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Guaranteed Income Rider, Tax Deductible?

Is the cost of a guaranteed income rider on an annuity tax deductble, as an investment expense?
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Old 10-03-2013, 01:29 PM   #2
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Whatever product you are thinking about is probably a terrible idea, but yes, riders are usually counted as part of contract expenses and therefore tax deductible.
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Old 10-03-2013, 02:11 PM   #3
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Are these in the Miscellaneous category subject to a floor of 2% of AGI before you can deduct?
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Old 10-03-2013, 02:33 PM   #4
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Are these in the Miscellaneous category subject to a floor of 2% of AGI before you can deduct?
Usually the cost of these idiotic riders is just subtracted from the returns (if any) of the contract, just like the expense ratio of a mutual fund.
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Old 10-03-2013, 02:54 PM   #5
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Usually the cost of these idiotic riders is just subtracted from the returns (if any) of the contract, just like the expense ratio of a mutual fund.
so is the net return reported (as for a mutual fund) and you don't really deduct it yourself?
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Old 10-03-2013, 03:35 PM   #6
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so is the net return reported (as for a mutual fund) and you don't really deduct it yourself?
Correct. All the IRS cares about is the net return of any investment.
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Old 10-03-2013, 05:25 PM   #7
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Is the cost of a guaranteed income rider on an annuity tax deductble, as an investment expense?
I don't think so, at least not in the way you are thinking about it as a Schedule A itemized deduction in the year it is paid.

I will ultimately be reflected in gain if/when you surrender or the taxable portion of the annuity if you annuitize.
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Old 10-05-2013, 02:08 PM   #8
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Is the cost of a guaranteed income rider on an annuity tax deductble, as an investment expense?
No.
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Old 10-05-2013, 02:10 PM   #9
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Originally Posted by brewer12345 View Post
Whatever product you are thinking about is probably a terrible idea, but yes, riders are usually counted as part of contract expenses and therefore tax deductible.

I've been looking into this closer, and it seems that these riders are not tax deductible.
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