Question
Type of Policy: Non-Qualified Single Premium Deferred Annuity (SPDA) Issue Date: August 15, 2001 Owner: John Kemp (68 years old) Primary Beneficiary: Mary Kemp Contingent
Type of Policy: Non-Qualified Single Premium Deferred Annuity (SPDA)
Issue Date: August 15, 2001
Owner: John Kemp (68 years old)
Primary Beneficiary: Mary Kemp
Contingent Beneficiary:Steven and Robert Kemp - 50% each
Original Investment into SPDA: $30,000
Other Additions: $0
Since Inception Basis Withdrawals: $5,000
Assume that John want to annuitize the annuity and is told that he can receive a straight life annuity for $350 a month for life. If the actuarialnumber of payments is 300.
Because the monthly straight amount is so low, John would like to know the tax consequences and filing requirements if he gifts this to his granddaughter Sara (11 years old) . Assume that Mary will elect to gift spilt. John and Mary want you to explain any generation skipping tax liability or tax consequences to this gift to Sara. What would be the face market value at time of gift? What would be the gift tax exclusion for John and gift tax exclusion for Mary?
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