If my LTC premiums were paid by a 1035 exchange, and the 1099-R indicates that it is a 1035 exchange, would it be possible to opt to include the gains portion of the distribution as income, and then use the total distribution amount as a LTC premium deduction by itemizing? In other words, does the 1099-R designation as a 1035 exchange take away the option to include the gain portion as taxable income and then taking the whole distribution as a deduction?
