1099R from variable life policy. All proceeds (gross distribution) was transferred to another variable life policy (purchase) with another company. Taxes on the proceeds?

sbrock · ‎June 3, 2019

DDollar · ‎June 3, 2019

If you did a 1035 Exchange, none of the proceeds would be taxable. A 1035 exchange is a provision in the tax code which allows you, as a policyholder, to transfer funds from a life insurance, endowment or annuity to a new policy, without having to pay taxes. If it was a 135 exchange, then the code in Box 7 of the 1099-R would be "6". If you did not do a 1035 exchange, some of the proceeds could be taxable.

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macuser_22 · ‎June 3, 2019

What code is in box 7?

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

DDollar · ‎June 3, 2019

If you did a 1035 Exchange, none of the proceeds would be taxable. A 1035 exchange is a provision in the tax code which allows you, as a policyholder, to transfer funds from a life insurance, endowment or annuity to a new policy, without having to pay taxes. If it was a 135 exchange, then the code in Box 7 of the 1099-R would be "6". If you did not do a 1035 exchange, some of the proceeds could be taxable.

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1099R from variable life policy. All proceeds (gross distribution) was transferred to another variable life policy (purchase) with another company. Taxes on the proceeds?