160. Purchase of annuities.

An annuity is an income purchased with a sum of money or an asset, which then ceases to exist, the principal having been converted into an annuity1. Thus, in order to constitute an annuity properly so called, the purchaser must have handed over the money or other asset altogether and converted it into a certain or uncertain number of yearly payments2. Where on an examination of the facts it is found that he has so parted with the money or asset, such yearly payments as he may receive will be taxable; if, however, it appears from the facts on