Are Annuities Taxable When Inherited? 
The answer in short is yes . There are strategies to stretch the taxable event over multiple generations before the death of the annuitant or owner of the annuity . -LRB- Remember annuitant owned and owner owed policies may have differing tax issues . -RRB- Ultimately , the size of the estate may dictate an additional estate tax beyond the ordinary income tax to inheritors . 