1099-misc for fractional life insurance payout

[momtobanda]

I received a 1099-MISC for a fractional life insurance payout.  If I enter this information, it is all calculated as income, but where can I enter the cost basis?  Obviously I don't want it to all show as income when a majority of the money included in the income was what I paid for the investment into it.

[AlanT222 · Accepted solution]

Life insurance policies that are cashed out (surrendered) aren't taxable up to the amount of the premiums and other contributions. Earnings on the policy above and beyond the amount invested are taxable.  So you only report the earnings, not the entire amount.  

[Carl]

Typically, a payout on a life insurance policy is reported on 1099-R, not 1099-MISC. So is that really a 1099-MISC you got? If so, what box is the income reported in? If a 1099-R, what is the code in box 7?

[Momtovanda]

Yes, it’s a 1099-misc, and the only box filled is 3.  I’m concerned about simply reporting my “profit”  when the amount on the form is higher.   I cannot find where I can deduct the cost.