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If you didn't receive a 1099 to report your life insurance surrender, the only taxable portion is the earnings over the amount of premiums you paid in.
Here's how to enter your earnings in TurboTax:
Here's more discussion on Life Insurance Surrender.
If the amount that you received from the surrender of the policy was less than your investment in the contract, the distribution is not taxable and the insurance company is not required to issue a Form 1099-R because there is no taxable income to report. Otherwise, the insurance company is required to have issued a Form 1099-R that you must obtain and enter into TurboTax.
Thanks Dmertz - That is exactly what the insurance company told me. The cash surrender value did not exceed $5,000 and the policy was issued prior to 08/12/82. If there is no required 1099R, do I need to include in my dad's taxes? Normally my dad's taxes are very easy. This life insurance cash surrender is stressing me out and was waiting for the 1099R. I went back and forth with Prudential and finally got the letter with the details I mention above.
This community is very helpful so THANKS. Thanks again.
If no Form 1099-R was required to be issued by the insurance company, nothing about the surrender of the policy goes on the tax return.
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