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Retirement tax questions
You shouldn't be taxed on the entire surrender value. You’ll be taxed on the amount you received minus the policy basis, which is amount of premiums that you paid. This taxable amount reflects the investment gains that you took out. Tha fact you received Form1099-R from your insurance company means that your insurance policy wasn't general life insurance, it was an annuity and it could be a subject 10% early withdrawal penalty.
March 1, 2021
4:47 PM