Private Annuity Definition
Private Annuity is an agreement between two parties in which one party sells an asset to another party in return for regular payments over the seller’s life expectancy. An annuity agreement is considered a private annuity, if neither of parties is in the business of selling annuities. This arrangement provides a tax shelter. Private annuity is often used to transfer assets to a family member where a normal transfer would be subject to gift or estate taxes.