With Profits Annuity

annuity. Why should I pay taxes on profits earned in the first installment?

The IRS provides a period of 60 days for money from a qualified (before taxes) of investment to be transferred or rolled over into another. If you receive a distribution, and it is not classified as a roller or a transfer, it will be taxed before we see all that money. If it is classified as one of these and sent to you before you go to your new business, while money falls under the rule of 60 days. If you hold beyond the 60 days it will be taxed.

Because you "cashed" it in. ....

perhaps as an IRA? if you have taken possession of the funds, and again made the payments, they barely classify as income? If you drive more and no money is received by you and Yu IRA pay no tax until early disbursement yu.

You must pay taxes on it because it is a capital gain. When you cash in the annuity you have purchased, these gains will be taxed as well. This is not a reversal, as a traditional IRA would be tax deferred and are not as they are in a traditional IRA.

the only way to avoid paying the benefits is to rotate similar to an annuity from a 401k to another. I think this is called an exchange of 1055, but I'm not 100%. I often get that confused with the 1031 real estate exchange

annuity income is not treated as a capital gain, it is treated as ordinary income. Annuities are bad, most people do not understand that it is a gamble that you will die sooner than the money. It is best to talk to a financial planner before making anything. Annuities are fresh footprints slowing your statements that Treasury bonds pay.