I received Form 1099-R that shows distribution code "D4". I can only enter either "D" or "4" but not the "D4" in Turbo Tax. What should I enter?

[lsing1141]

My sister died in 2015 and left me as a benificary of her pension.  I received form 1099-R and box 7 has code "D4" in it.   Can I enter D in box 1 and 4 in box 2?

[jerry2000 · Accepted solution]

For Box 7, there are two data entry fields, one above the other. In the Upper one, enter D, in the Lower one enter 4. that enters D4 into Box 7.

[MLJones1787]

Why, after putting the D4, D in the first box and 4 in the second box, from my 1099 R form does TurboTax ask the age of the person had they lived?

This  is not a return for a deceased person but this is a 1099 R for an annuity transferred to me when my mother died in 2019.

[dmertz]

This is an inherited annuity.  The code 4 indicates that you are receiving distributions as beneficiary of your mother.  TurboTax is asking about the age your mother would have been had she lived.  However, this question is unnecessary because the insurance company determines the necessary amount to distribute to satisfy distribution requirements.  The distributions are also not eligible for rollover, so there is no need for TurboTax to know how much is RMD; all of it is considered to be RMD.

[niebauer]

I RECEIVED TWO 1099-R FORMS FROM MY MOM AS BENEFICIARY.  WHEN I ENTER THE INFORMATION THE TOTAL IS ADDED TO MY INCOME.  EACH INSURANCE HAS FEDERAL INCOME TAX WITHHELD.

I THOUGHT THAT INSURANCE RECEIVED AS A BENEFICIARY IS NOT TAXED

[LindaS5247]

How was Box 7 of your Form 1099-R coded?  You should enter each Form 1099-R exactly as shown.

Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them. However, any interest you receive is taxable and you should report it as interest received.

However, it depends on what exactly this is.  If it is an annuity purchased from a life insurance company then it is not an insurance payout and it is taxable.  Does it have Code 4 (death) and Code D (Annuity payment)?

If so then this is an annuity purchased from a life insurance company, not a life insurance payout.  And it is taxable income.  These deferred accounts do not get a stepped-up basis on death.  The issuer of the annuity may be able to give you some more detail on this investment. 

[dmertz]

A payout from life insurance is not taxable, but Forms 1099-R are used for distributions from many other types of accounts which are taxable distributions.  If the Form 1099-R has a taxable amount shown in box 2a, it seems that the distribution is not a payout of a life insurance policy (even if the account is held by an insurance company).