A few years ago, my wife inherited the assets from some sort of retirement account from a deceased relative. At the time, we were less investment-literate than today, so with the aid of a financial planner, the assets were transferred into an individual retirement annuity account in my wife's name, issued by a large insurance company. Each year, she is required to take required minimum distributions from the annuity (I believe due to the age of the relative that she inherited the account from), which show up as taxable income for us (that we don't really need at this point in time).
I would like to avoid the required distributions, obtain greater choice of investments, and in general consolidate our investment picture by moving these assets into a different account structure. It would seem to make sense to roll the assets over into a traditional IRA (she already has one from rolling over a previous employer's qualified retirement plan contributions). Is this possible without significant penalties? I understand that redemption of the annuity has a surrender charge associated with it, but I'm wondering if I can make the move without incurring adverse income tax consequences.