1099-R with only gross distribution reported

[stevemp]

I have a 1099-R that only reports the gross distribution.  I want to include the cost basis (which was $10,000) to offset the gross distribution of $15,727 but not sure how to do it since no other information is included on the form.

[macuser_22]

What type of retirement account? 

Is the IRA/SEP/SIMPLE box checked?

[stevemp]

It was a life settlement policy (i.e., life insurance) that I bought in for a share of at $10,000 over 10 years ago and received my share of the maturity  which was $15,727 which is reported on the 1099-R only as gross distribution with a code of "7".  Trying to figure out if I put in the $5727 on line 3 as Capital Gain (also 2a as Taxable Amount)  on the TurboTax input form even though nothing is reported on the 1099-R. 

[macuser_22]

No you do not put anything on line 3.

If you cashed out the policy then the issuer should have figured the box 2a taxable amount and subtracted your cost basis and premiums form the box 1 amount. 

https://www.irs.gov/faqs/interest-dividends-other-types-of-income/life-insurance-disability-insuranc...

[stevemp]

But they didn't.  There is nothing else on the form other than the gross distribution amount.  So, how do I treat this for reporting purposes so I am not taxed on the entire amount?

[macuser_22]

Sorry  I don't have much knowledge about life insurance - live insurance can depend on the terms of the contract.

You could ask the payer. 

Here is an article.

https://theinsuranceproblog.com/is-the-cash-surrender-value-of-life-insurance-taxable/