Turbotax will not take my 1099-r info because taxable amt is greater than gross distribution. i entered the difference in other income- how to get 1099-r accepted?

[cadrstar]

This involves the surrender of a life insurance policy.

[Bsch4477]

Did the cash surrender value plus any outstanding policy loans exceed the investment in the policy?

[cadrstar]

It is not really life insurance but an estate protection policy.  There were also loans taken out against it over the years. I contacted insurance company and they say the difference is taxable income and to contact TurboTax if they won’t accept info on 1099-r.  Googling says contact life ins company.  If difference is taxable income, can I just input gross income the same as taxable?

[cadrstar]

Yes- note on 1099-r says” amt shows policy gain….”

[Bsch4477]

Is the box checked that reads  amount not determined?  What amounts are in boxes 1 and 2a?

[dmertz]

There is at least on insurance company which issues Forms 1099-R with the taxable amount greater than the distribution amount under these circumstances, which I believe is improper.  It makes no sense to tax something that is not being considered as having been distributed to you.  I suspect that the taxable amount is correct but the insurance company is underreporting the amount that should be present in box 1.  Others posting here who have had this problem under these circumstances do not seem to have not gotten the insurance company to make any changes to the amounts on the form.

A loan offset distribution taxes on the outstanding balance of a loan, cash that was previously paid to you but  not previously reported as a distribution.  The amount of the offset should be included in box 1, and I suspect that the insurance company is failing to include this.  The loan represents an asset of the plan, so you can think of the offset distribution as being a cash distribution of the value of that asset which you then simultaneously pay back to the plan to satisfy the outstanding loan.

[fanfare]

Enter as gross distribution the taxable amount shown in box 2a

"i entered the difference in other income-"

if the increase in AGI causes other problems, entering as a negative amount sounds reasonable.

@cadrstar 

[cadrstar]

Thankyou for the info.  I finally decided to put the taxable amt in box 1 and remove what I had added as additional taxable income.  Info was accepted.  A friend tried the info (as given) in another tax program and she said the presentation was different but the result was the same.  One time event so don’t have to worry about it again.  Appreciate all the answers.  Thankyou C