I own stock in a Sub S corp that cashed a life insurance policy that is subject to the 10% tax penalty. It was a modified endowment contract. I need to file form 5329 and report my part of the distribution on line 1. The electronic form in Turbo Tax does not have a line in the smart worksheet for line one for entering a MEC distribution. When I use the override to enter an amount in lines 1, 3 & 4 it creates an error in Turbo Tax saying I should not use the override; however, it does add the 10% penalty to my taxes due.
Is there another way to do this or am I on the right track?
