When you use part of your Individual Retirement Account to purchase a SPIA, the SPIA is part of the Individual Retirement Account and you must calculate your RMD by including the value of the SPIA. This can be tricky as the value of the SPIA may not be easily determinable every year. Because an RMD is based on the value of the funds in the Individual Retirement Account at the end of the prior year (i.e. a 2011 RMD is based on the value of your Individual Retirement Account as of 12/31/10) you must include in this value calculation the value of the SPIA. How is this done? You must determine the present value of the SPIA at the end of the prior year so that the value of the Individual Retirement Account can be determined in order to then determine the RMD.
.A transfer of funds in your traditional IRA from one trustee directly to another, either at your request or at the trustee’s request, is not a rollover.
pub 590This publication discusses individual retirement arrangements (IRAs)
Your traditional IRA can be an individual retirement account or annuity.
Eligible rollover distribution. An eligible rollover distribution is any distribution of all or any part of the balance to your credit in a qualified retirement plan except:
1.Any of a series of substantially equal distributions paid at least once a year over:
a.Your lifetime or life expectancy,
b.The joint lives or life expectancies of you and your beneficiary, or
c.A period of 10 years or more,
2.A required minimum distribution (discussed later under Tax on Excess Accumulation ),
4.Corrective distributions of excess contributions or excess deferrals, and any income allocable to these distributions, or of excess annual additions and any allocable gains (see Corrective distributions of excess plan contributions , at the beginning of Taxation of Nonperiodic Payments, earlier),
5.A loan treated as a distribution because it does not satisfy certain requirements either when made or later (such as upon default), unless the participant's accrued benefits are reduced (offset) to repay the loan (see Loans Treated as Distributions , earlier),
6.Dividends paid on employer securities, and
7.The cost of life insurance coverage.
In addition, a distribution to the plan participant's beneficiary generally is not treated as an eligible rollover distribution. However, see Qualified domestic relations order (QDRO) , Rollover by surviving spouse , and Rollovers by nonspouse beneficiary , later.
JDCPAEsq wrote:Simple answer: No. Once you buy the SPIA taxable payments will be made to you, not to the IRA
I'm in no way questioning John (I actually own an IRA that can be annuitized, but I've chosen not to do so).
However, it appears that versions of your question have appeared at Ed Slott's discussion site, so here's a link in the hopes that the exchanges may touch on some of your interests.