News | 08.12.19
IRS Delivers 'Game Changer' for Fee-Based Annuities
The Internal Revenue Service (IRS) has issued a tax ruling that may quickly increase the use of annuities by registered investment advisers (RIAs) with clients, by knocking down what many saw as the primary road block to their uptake. The IRS furnished a private letter ruling to insurer Nationwide allowing RIAs to pull clients' advisory fees from the cash value of a non-qualified fee-based annuity without any adverse tax consequences, which runs counter to the existing rules. "That's a game changer for fee-based annuities," says Sheryl Moore, president and CEO of consulting firm Moore Market Intelligence. "That's been one of the huge issues: People were concerned that if you take a withdrawal from the annuity to pay the adviser's fee you create a taxable event."
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