Question

Question 13

When does interest income for a flexible premium deferred annuity get reported for federal inco
taxes?
O Never
O After the principal has been exhausted
O Upon receiving distributions from the contract
O During the accumulation phase
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Answer 1

Interest income for a flexible premium deferred annuity is reported during the accumulation phase.

Step-by-step explanation:

Interest income for a flexible premium deferred annuity is reported for federal income taxes during the accumulation phase. As the name suggests, a flexible premium deferred annuity allows the investor to make contributions over time rather than in a lump sum. During the accumulation phase, the interest earned on the annuity is not taxed until it is received as distributions.

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