A 1099-R that you receive with code W in Box 7 should not be included on your tax return. This 1099-R is issued for informational purposes only: showing the amount of a long term care insurance rider charge deducted from a life insurance policy cash value in Box 1, and the corresponding reduction in basis to the policy cash value in Box 8. The instructions included with this 1099-R should have clearly stated this. There is no tax or penalty due.
