Hi all. I have an odd situation I've never seen before. I have a client who purchased a qualified annuity for about $140,000. She used funds from 2 accounts to purchase it. One acount was an IRA she rolled over of $90,000, the other account was a non-qualified account of $50,000, almost all of which was not taxable. All of this was put into the same taxable qualified annuity. According to the insurance company there is no way to undue this.

So what do we do about that $50k of non-taxable funds. Can we set up basis for it on an 8606? Anyone have this happen before and have any advice? Thanks for any help you can provide.

I hope your tax seasons have been good and that you all get a much earned rest on the 16th!