PLR 202109002 and PLR 202109003 (Mar. 8, 2021): Investment Advisory Fees Not Treated as “Amount Received” for Code Sec. 72(e) Purposes for Annuity Contracts

In PLRs 202109002 and 202109003, the Service ruled that t certain annuity contract investment advisory fees are not treated as amounts received by the contract owner for Code Sec. 72(e) purposes.

The taxpayers were insurance companies offering non-qualified deferred annuity contracts.

The IRS stated observed that the fees, which were integral to the contracts, did not constitute compensation to the adviser for services related to any of the owner’s assets other than the contracts or any services other than investment advice services with respect to the contracts. Therefore, the fees were a contract expense and not a distribution to the owner.

See the full PLRs by clicking the following :PLR 202109002 and PLR 202109003.

Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.

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