I have same circumstance, having cashed in an old whole-life policy with a gain, but insurance company says in a letter that (1)" because the surrender value of the original policy is less than $5000 and" (2) " the policy was issued prior to August 13, 1982," the IRS does not require the company to report the gain. The letter does not provide a cite to tax authority and so far the company has not done so on request. I can't find it either so it must be pretty obscure unless you're an insurance company or insurance tax geek.... Any idea for a citation?
