Life · Chapter 9 · Annuity Taxation
Corporate-Owned Annuities (Non-Natural Person Rule)
Definition
A corporation may OWN an annuity, but must name a natural person as annuitant (the "measurable life") for interest to stay tax-deferred. If a non-natural entity is the annuitant, interest is taxable as ordinary income each year as credited. Exceptions (tax deferral kept): held as agent for a natural person (e.g., a trust), acquired by an estate at death, held in a qualified plan/TSA/IRA, or an immediate annuity.
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