wraparound annuity

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Wraparound annuity

An investment that allows the annuitant the choice of underlying investments tax-deferred.

Wraparound Annuity

An annuity contract allowing an investor some control over the underlying securities and assets. The funds in a wraparound annuity are tax-deferred until withdrawal. The IRS does not allow the purchase of a wraparound annuity if it is possible to purchase the same investments without a tax deferral. Therefore, a wraparound annuity is not a permitted tax avoidance vehicle.

wraparound annuity

An annuity contract in which the investor has a measure of control regarding the investments that are in the plan, and in which the income generated by those investments is sheltered from taxation until withdrawal. Tax deferral through a wraparound annuity is no longer permitted by the Internal Revenue Service.
References in periodicals archive ?
Goldberg & Lemke, supra note 27, at 449-50 (internal quotation marks omitted); see also Jill Bettner, Wraparound Annuities Could Be Hurt by Expected IRS Ruling on Ownership, WALL ST.
that, in part, attracted more than $1 billion into the so-called wraparound annuities in the last three years.
This report was accompanied by an editor's note: "Business Week erred in extending the rationale of Revenue Ruling 80-274 to include mutual fund wraparound annuities.
The Service responded to the "problems encountered by issuers of wraparound annuities attempting to comply" by affording an additional year's relief for "capital gains dividends and unrealized appreciation.
83-35-124 (May 27, 1983); see Service Notes Procedures for Obtaining Ruling on Wraparound Annuities, 20 TAX NOTES 770, 797 (Sept.