The Internal Revenue Service has proposed regulations that would apply the same rules to taxpayers who trade either ordinary commercial annuities or "private" annuities for other property.
Private annuities are annuities issued by persons who are not normally in the business of issuing annuities.
Years ago, the IRS let taxpayers postpone paying taxes on private annuity exchanges because valuing the annuities was difficult. Now, that assumption is outmoded, and taxpayers are using the distinction to avoid paying taxes, officials say.
The proposed regulations would not apply to charitable annuities, but they would eliminate distinctions between secured and unsecured annuities, and between commercial annuities issued by insurers and private annuities.
