wraparound annuity

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Wraparound annuity

An investment that allows the annuitant the choice of underlying investments tax-deferred.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
that, in part, attracted more than $1 billion into the so-called wraparound annuities in the last three years."); Hayes, supra note 146, at 30 ("[M]ore than $1 billion has flowed into the five biggest funds since ...
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." Id.
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." IRS News: Relief Issued for Wraparound Annuity Reporting, 14 TAX NOTES 440, 440 (Feb.
(describing idea of introducing clones); see also Petrie, supra note 85, at 113-14 (discussing ways in which insurance companies could avoid the ruling); Jill Bettner, IRS Attacks Popular 'Wraparound Annuities,' But Companies Ready New Tax-Deferral Plans, WALL ST.
83-35-124 (May 27, 1983); see Service Notes Procedures for Obtaining Ruling on Wraparound Annuities, 20 TAX NOTES 770, 797 (Sept.