Gain on a full surrender Gain on partial distributions IRA distributions TSA / ORP distributions Correction of excess contributions to
IRAs Conversion of IRA
assets to a Roth IRA Gain on surrender of Paid Up Additions (PUAs)(Note: Automatic surrender of PUAs for Value Pay is not a taxable event) Processing of Non-Forfeiture Option (NFO) to Extended Term Insurance (ETI) or Reduced Paid Up (RPU) Interest earned on dividend accumulations Loan on a MEC Dividend used to reduce loan interest on a Modified Endowment Contract (MEC) Dividend used to reduce loan on a MEC Compound of loan interest on a MEC Gain recognized on lapsed contract with a loan Collateral assignment on a MEC Non-qualified Annuity (NQA) Collateral Assignments Special interest paid on money held too long Interest earned on advance premiums 1035 exchange without paying off loan first Earnings on non-individual
owner contracts for which an exception under section 72 (u) of the Internal Revenue Code does not apply
Because
IRAs were created to provide income during retirement — not to be a tax shelter — IRA
owners failing to take their RMDs are subject to a 50 percent excess accumulation penalty tax on the
assets that should have been distributed but were not.