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 ?
and that wrap-around annuities did not fit that description." 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.
Kess, Wrap-Around Annuities Maintain Tax Deferral Through Diversification, 13 J.