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IRS.gov Website
Publication 939
taxmap/pubs/p939-003.htm#en_us_publink1000310330

Worksheets for Determining Taxable Annuity(p11)

rule
taxmap/pubs/p939-003.htm#en_us_publink10001413

Worksheets I and II.(p11)

rule
Worksheets I and II follow for determining your taxable annuity under Regulations Section 1.72–6(d)(6) Election.
taxmap/pubs/p939-003.htm#en_us_publink1000313097

Worksheet I
For Determining Taxable Annuity Under Regulations Section 1.72-6(d)(6)
Election For Single Annuitant With No Survivor Annuity

       Pre-July 1986 Post-June 1986
A. Refund Feature Adjustment  
  1) Net cost (total cost less returned premiums, dividends, etc.)  
  2) Annual annuity allocation:    
     Portion of net cost in A(1)  x  annual annuity   
         Net cost    
  3) Guaranteed under the contract  
  4) Number of years guaranteed, rounded to whole years:    
     A(3) divided by A(2)  
  5) Applicable percentages* from Tables III and VII  
     *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. If not, the IRS will calculate the refund feature percentage.     
  6) Refund feature adjustment:    
     A(5) times lesser of A(1) or A(3)  
          
B. Investment in the Contract    
  1) Net cost:    
     A(1)  
  2) Refund feature adjustment:    
     A(6)  
  3) Investment in the contract adjusted for refund feature:    
     B(1) minus B(2)  
          
C. Expected Return    
  1) Annual Annuity:    
     12 times monthly annuity**  
  2) Expected return multiples from Tables I and V  
  3)  Expected return:    
     C(1) times C(2)  
          
D. Tax-Free Part of Annuity    
  1)  Exclusion ratio, as a decimal rounded to 3 places:    
     B(3) divided by C(3)  
  2)  Tax-free part of annuity:    
     C(1) times D(1)  
  **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment.   
taxmap/pubs/p939-003.htm#en_us_publink1000313098

Worksheet II
For Determining Taxable Annuity Under Regulations Section 1.72-6(d)(6)
Election For Joint and Survivor Annuity

       Pre-July 1986 Post-June 1986
A. Refund Feature Adjustment    
  1) Net cost (total cost less returned premiums, dividends, etc.)  
  2) Annual annuity allocation:    
     Portion of net cost in A(1)  x  annual annuity   
           Net cost    
  3) Guaranteed under the contract  
  4)  Number of years guaranteed, rounded to whole years:    
     A(3) divided by A(2)  
  5) Applicable percentages*  
     *If your annuity meets the three conditions listed in Zero value of refund feature in Investment in the Contract, earlier, both percentages are 0. If not, the IRS will calculate the refund feature percentage.     
  6) Refund feature adjustment:    
     A(5) times lesser of A(1) or A(3)  
          
B. Investment in the Contract    
  1) Net cost:    
     A(1)  
  2) Refund feature adjustment:    
     A(6)  
  3) Investment in the contract adjusted for refund future:    
     B(1) minus B(2)  
          
C. Expected Return    
  1) Multiples for both annuitants, Tables II and VI  
  2) Multiple for retiree. Tables I and VI  
  3) Multiple for survivor:    
     C(1) minus C(2)  
  4) Annual annuity to survivor:    
     12 times potential monthly rate for survivor**  
  5) Expected return for survivor:    
     C(3) times C(4)  
  6) Annual annuity to retiree:    
     12 times monthly rate for retiree**  
  7) Expected return for retiree:    
     C(2) times C(6)  
  8) Total expected return:    
     C(5) plus C(7)  
          
D. Tax-Free Part of Annuity    
  1) Exclusion ratio, as a decimal rounded to 3 places:    
     B(3) divided by C(8)  
  2) Retiree's tax-free part of annuity:    
     C(6) times D(1)  
  3) Survivor's tax-free part of annuity, if surviving after death of retiree:    
     C(4) times D(1)  
  **If the annuity is not paid monthly, figure the amount to enter by using the total number of periodic payments for the year times the amount of the periodic payment.