I want to sell a position, then purchase an annuity and allocate all the proceeds into the same fund within the annuity. Can I take a tax loss, or is that a wash sale?
If A Mutual Fund Is Sold, Then Purchased Back Within An Annuity, Is It Considered A Wash Sale?
23
Sep
muncie birder
September 23, 2009 at 3:28 pm
Tax “gains” and “losses” on mutual funds don’t work like buying and selling stocks. Capital gains and dividends are “passed through” to shareholders on an annual basis.
Dave
September 23, 2009 at 4:16 pm
Interesting question. I do not know the answer. An annuity is not “substantially identical” but the IRS is the final judge on that question not you and not I. The same question arises in selling one S&P500 index fund at a loss and replacing it with another. The IRS might very well consider them substantially identical.
Are you aware of the tax consequenses and additional fees associate with annuities? Annuites are not taxed the same way that mutual funds are taxed. All gains from annuities are taxed as ordinary income although it is deferred.