Is the taxable amount of a life insurance surrender entered as a dividend or pension/IRA payout? What section of Turbotax do you use?
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New Member

Is the taxable amount of a life insurance surrender entered as a dividend or pension/IRA payout? What section of Turbotax do you use?

The taxable amount is referred to as a dividend by the insurance company and TurboTax looks at 1099-R as IRA/Pension payout (not insurance surrenders). 

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Level 15

Is the taxable amount of a life insurance surrender entered as a dividend or pension/IRA payout? What section of Turbotax do you use?

You should get a 1099R and it would be shown in the IRA/pension area:

If you cash in a life insurance policy you may have taxable income. The taxable income would be -

  • the cash surrender value that you received, minus
  • premiums paid over the life of the policy. On a mutual policy, premiums are net of participating dividends.

Generally, this only results in income on older policies. Your insurance company should send you a Form 1099-R for the income to report.


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