John Woodford,

Please go back and read my posts again, more carefully as I did compare and contrast the tax treatment of both types of annuitiy losses. One type has two widely recognized choices for where to deduct and the other type has only one choice for where to deduct.

The two types of deductions being discussed are (1) loss on "surrender" of a commercial single premium deferred annuity and (2) Decedent's deduction for unrecovered basis in an annuitized annuity.

For the first type (1) loss on "surrender" of a commercial single premium deferred annuity, there ARE TWO CHOICES. The first choice is the aggressive approach on Page 1 1040 Line 14, with no AMT, which is discussed on the BNA web site and several other web sites. The second choice for the same type (1) is a 1040 Sch A deduction subject to the 2% limitation and subject to the AMT, also discussed on the BNA and several other web sites.

For the second type (2) Decedent's deduction for unrecovered basis in an annuitized annuity, there is only one choice which is Sch A deduction Line 27 not subject to the 2% limitation. This type (2) is the one discussed in IRS Publication 529 Page 10 through 12. The topic heading on page 10 is amplified on page 12 to mean Decedent's deduction for unrecovered basis in the annuitized annuity.

I did correct one post about IRS Pub 529 Page 10 and 12, which I assume you also read.

If you will go back and read my posts very carefully, I think you will agree.

John Gregory