In my opinion, your insurance company should have determined the taxable amount and included it in Box 2a. The only way I can figure out how to report the 1099-R, and get the correct taxable amount to flow to your Form 1040 is to calculate it and enter it in box 2a of your 1099-R entry. This will result in the correct taxable amount flowing to your Form 1040, line 4b.
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