I am working on my late father's final tax return for 2024. Before he died, I helped him claim two properties from the State of Wisconsin related to a 20-pay life insurance policy his mother started in 1943. Wisconsin sent a 1099-INT (unreceived as of yet thanks to the USPS, so I'm working with them to get a copy) for the interest earned while the state was holding them so that's easy.
1. The first property is tagged as IN77 Limiting Age for $6082.26. My understanding is this is from the insurance company cashing out the policy at its maturity. I know my grandma made $400.80 in premium payments over the 20 years ($1.67/month for 20 years) and the face value was $500.
Am I correct in thinking that this would be entered as a 1099-R where the gross distribution (line 1) is $6082.26, the taxable amount is $5681.46 (line 2), and insurance premiums (line 5) is $400.80? If so, do I enter this as a substitute 1099-R since the State of Wisconsin isn't providing anything beyond the 1099-INT mentioned earlier?
2. The second property is IN30 Demutualization Cash Proceeds for $767.88. My understanding is that in this situation my grandma was deemed to have received stock and then sold it back to the company resulting in a long-term capital gain with a $0 cost basis. Prudential's demutualization occurred on Nov 16, 2001, and lost shareholders received $28.44/share. Based on that I know my grandma received 27 shares.
So, my first thought would be to enter it as a 1099-B and entering the details including selecting that the shares were received from a demutualization. But if I do that it wants to know the date sold/disposed. Even though I know the actual date it occurred, the program won't let me enter the actual date because it didn't occur in this tax year. Do I leave it blank (the program complains about this) or put when my dad received it?
Appreciate any guidance.
