DEFERRING CAPITAL GAINS TAXES WITH THE PREMIER VI PRIVATE ANNUITY TRUST^©

Deferral of Payments:
Often annuitants will choose deferral because they have other income and don’t need the payments right away. Of course, annuity payments may begin immediately too; deferral is strictly an option. The deferral can be any amount of time, though payments must begin by age 70-½ . For the annuitant there are no capital gains taxes owed on the asset sale at any time during the deferral period.

Figure 6 provides a time line illustration of what happens when there is a deferral. This annuitant is 45 years old at the time of the creation of the private annuity transaction, doesn’t need the payment and he chose a 20 year deferral. He receives no payments during the 20 year deferral and pays no taxes. At age 65 the payment period begins for the annuitant. At that age the annuitant has a 20 year life expectancy according to IRS tables. During the annuity payment period the annuitant will receive taxable annuity payments for as long as he lives, regardless of whether that is longer than, shorter, or exactly 20 years.