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I used the surrendered cashout from a life insurance policy as a direct rollover to new policy. I rcv'd a 1099-R from the original co. Do I have to enter this 1099-R?

I did not receive any cash from the policy. It was a direct rollover to a new policy.  The 1099-R was from the original co and I have the policy documents showing it being used at initial premium paid. Do I have to enter this 1099-R?
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GeoffreyG
New Member

I used the surrendered cashout from a life insurance policy as a direct rollover to new policy. I rcv'd a 1099-R from the original co. Do I have to enter this 1099-R?

The answer to your question is yes, you should still enter the Form 1099-R data into TurboTax because, although there may be no actual taxes due on this transaction, there is still a reporting requirement obligation (on your part, as the recipient) to meet.  As such, the IRS will be looking for it to appear on your tax return.

If you look carefully at your own 1099-R statement, and notice the distribution code listed in Box 7 ("G" for a rollover transaction, for example) this will determine the taxability in the software program, and on your return.

To better understand the "disclosure" aspect of this (even where there is no tax due), please look at the screen-capture image located beneath this text.  On Form 1040A, the non-taxable portion of a 1099-R rollover will appear on Line 12a (which is circled in blue pen), and the taxable portion (if any) will similarly appear on Line 12b.  This is an example of the information that the IRS will see when you file your tax return . . . and which is not always apparent in the interview mode of TurboTax.

In the absence of any entry for Line 12a then-- and yet your life insurance policy company has told the IRS to be looking for such an entry, by their sending you a Form 1099-R -- the IRS may become curious and start asking you questions.  They may even send you a letter or a notice.

In order to avoid any of those potential issues, you are therefore advised to "disclose" the 1099-R, even if there is no tax due.  In fact, it's something you'll want to do for your own protection.

As to how you can mechanically enter a 1099-R in TurboTax, we have a Frequently Asked Questions webpage dedicated to just that answer.  Here is the link:

https://ttlc.intuit.com/questions/2562810-where-do-i-enter-my-1099-r


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