Colorado Bankers (CB Life)...

[ProActive]

I just figured my taxes and, according to the CBL 1099, I have to pay a whopping amount to the IRS. It seems to me as if the entire 25% I received in August is being considered interest and not principal, and now I am being taxed on the full amount of the annuity while only receiving 25% of it.

Am I correct in assuming this and if yes, does that mean that the remainder of the annuity (if and when we all may get it) will not be taxed, because we paid taxes already on the full amount this year?

 

[Allen Trent]

I just figured my taxes and, according to the CBL 1099, I have to pay a whopping amount to the IRS. It seems to me as if the entire 25% I received in August is being considered interest and not principal, and now I am being taxed on the full amount of the annuity while only receiving 25% of it.

Am I correct in assuming this and if yes, does that mean that the remainder of the annuity (if and when we all may get it) will not be taxed, because we paid taxes already on the full amount this year?

Legally, if you owned a Nonqualified Annuity funded from either pre-tax payment paid to CBL or funded via a 1035 exchange from a Nonqualified Annuity you bought previously from another carrier, you must take out all taxable interest before you can touch your original cost basis principal (LIFO--Last In First Out)

So, if you received 25% of your total value, it could be all taxable if your account value had 25% of tax deferred interest built up in it (at CBL or even a prior carrier)

Had you done a partial 1035 exchange of the 25% to a different annuity carrier, you could have done that without a 1099 for a taxable amount. The 1099 would have been coded as none of it currently taxable as the new carrier would have received how much of it was taxable interest & how much cost basis that would be built into your new contract at the new carrier

Sadly, there is nothing you can do about this currently, as once you take possession of the money, you cannot reverse that tax notification.

In the future, if you receive back less after Guaranty Association, you might be able to work with your CPA to adjust how much you actually got out in total for taxable interest & original cost basis.

 

[ProActive]

Thanks, Alan. Another question: is the 1 billion fraud case that NC is bringing against Lindberg on behalf of policyholders and creditors in lieu of all of us creating a class action lawsuit? Do you think any of us (or our descendants:( j will ever see any money from this?

 

[ProActive]

Fyi

 

[Allen Trent]

Thanks, Alan. Another question: is the 1 billion fraud case that NC is bringing against Lindberg on behalf of policyholders and creditors in lieu of all of us creating a class action lawsuit? Do you think any of us (or our descendants:( j will ever see any money from this?

I am hopeful you will. But I have no experience with a failed insurance company because it is so rare. Add to it this fraud component & it is uncharted territory to get through the crime, liquidation phases before moving to eventual payments from Guaranty Associations

 

[ProActive]

State Appeals Court deals another blow to former top NC political donor Lindberg

The North Carolina Court of Appeals has issued a ruling preventing one of Greg Lindberg’s companies from delaying the liquidation of two other insurance companies he owns. Lindberg was once North Carolina’s top election campaign donor. He’s scheduled to face a retrial this spring on federal...

www.carolinajournal.com

 

[dnmarks55]

This is an encouraging ruling by the State Appeals Court. Does this mean that the liquidation of Colorado Bankers Life might happen this year or are there more delays and appeals expected before this is settled?

 

[Allen Trent]

State Appeals Court deals another blow to former top NC political donor Lindberg

The North Carolina Court of Appeals has issued a ruling preventing one of Greg Lindberg’s companies from delaying the liquidation of two other insurance companies he owns. Lindberg was once North Carolina’s top election campaign donor. He’s scheduled to face a retrial this spring on federal...

www.carolinajournal.com

I hate to make light of a serious situation, but I am immature & cant help myself.

Had we all seen this picture prior to being sold an annuity manufactured by this company, would we have actually bought it?

wowza, not to Monday morning quarterback judge him ,but pretty sure I would never have bought anything from any company with him as the face of the organization. He looks more qualified to be a Presidential candidate or lifelong congress member

 

[rats0001]

Sounds good, but lindberg will probably try something else to delay, delay, delay.

 

[Dan T]

Fingers crossed