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SPIA Purchase from Tax Deferred Account

Posted: Sat Nov 29, 2014 5:38 pm
by sparky62

Just wondering how you would enter the purchase of a SPIA from a tax deferred account (RRSP) and then the annuity income which is now also deferred taxable income from that point on.

Right now I have entered the purchase into the additional inputs screen - but it appears that I am fully taxed on that expense ("Other Expenses") - when in reality there would be no tax payable at that time - just the yearly income from the SPIA itself.

Thanks for your help.


Re: SPIA Purchase from Tax Deferred Account

Posted: Sun Nov 30, 2014 9:25 am
by jimr
It's a little messy, but one way to do it would be to reduce the annuity purchase cost to offset the taxes calculated on the tax deferred withdrawal.

In other words, when you create the expense for the annuity purchase, set the amount such that the total withdrawal (amount + taxes) equals the cost of the annuity.

This assumes you're already setting annuity income cash flow to be 100% taxable.