Life insurance surrender

[user17704114277]

I received a 1099-R from a life insurance company. It has box 2b checked that says "taxable amount not determined" My premiums paid in exceeds the distribution. I see that this would not be taxable per IRS regs. How do I enter the 1099 in turbo tax home and business and be able to account for box 2b being checked and enter the total of premiums paid to wash out the taxable gain?

[AmyC]

Follow these steps:

1. Take a look at your 1099-R box 5. This would show the total premiums paid in. If your premiums equal or exceed the distribution, it is tax free.
2. After you enter the 1099-R, you will select non-qualified plan.
3. Look at your Form 1040, box 5a shows the total received, box 5b shows the taxable amount.

[user17704114277]

I have nothing in box 5 to indicate premiums paid.

[dmertz]

This indicates that the payer lost track of your investment in the contract.  TurboTax used to properly ask if under these circumstances the amount in box 2a represents the correct taxable amount and, if not, allow you to indicate that you used the General Rule to determine the taxable amount and allow you to enter that amount.   TurboTax would then simply place your entered taxable amount in box 2a of the Form 1099-R.  Beginning with 2024 TurboTax, this necessary question was removed from TurboTax, so you'll need to enter the $0 taxable amount in this case in box 2a yourself.

In case the IRS questions your indication that $0 is the taxable amount, be sure to retain whatever records you have showing your investment in the contract  that justify your assertion that the taxable amount is zero.