A bill to amend section 72 of the Internal Revenue Code of 1954 relating to the taxation of annuity contracts.

Amends the Internal Revenue Code to require the owner of a nonqualified deferred annuity contract to include in gross income for each taxable year prior to an annuity starting date: (1) the excess of the contract's value as of the end of such year (plus any amount received under it that was not includible in income); over (2) the contract's value as of the end of the preceding taxable year (plus the aggregate amount of any premiums or other consideration paid for the contract during such year).

Exempts from such requirement: (1) any annuity contract which permits no surrender, redemption, or withdrawal, and which provides for distributions only in the event of death or in a predetermined schedule of payments involving life contingencies or installments extending over a period of at least 60 months; and (2) any qualified employee benefit plan annuity contract.