topic Where enter basis in Cash Surrender Value in Get your taxes done using TurboTax

Where enter basis in Cash Surrender Value

Ludwik — Mon, 01 Mar 2021 20:21:45 GMT

Where in Turbo Tax do I enter my basis (premiums paid) in the Cash Surrender Value of a Life Insurance Policy I cashed out? I received a form 1099-R and Box 2a Taxable amount was 0 and box 2b Taxable amount not determined was checked.

Re: Where enter basis in Cash Surrender Value

ToddL99 — Mon, 01 Mar 2021 21:56:10 GMT

What was the distribution code in Box 7?

Re: Where enter basis in Cash Surrender Value

Ludwik — Mon, 01 Mar 2021 22:02:13 GMT

Box 7 has a "7" in it.

Re: Where enter basis in Cash Surrender Value

ToddL99 — Mon, 01 Mar 2021 22:38:04 GMT

Is the amount in Box 1 the same that you got paid by the insurance company?

Re: Where enter basis in Cash Surrender Value

Ludwik — Mon, 01 Mar 2021 22:48:11 GMT

Yes, the amount in box 1 is the amount I was paid

Re: Where enter basis in Cash Surrender Value

ToddL99 — Mon, 01 Mar 2021 22:59:55 GMT

If you know what you paid in premiums, deduct that total from the amount you received as "cash-out" (Box 1) and put the resulting figure in Box 2a.

This post addresses the same issue you are facing and makes a couple of suggestions - 1099R for cash out of life insurance

In my opinion, @DavidD66 's suggestion is the best approach. It results in an accurate tax calculation, which is what the IRS is most interested in achieving..

His commentary was: "your insurance company should have determined the taxable amount and included it in Box 2a. The only way I can figure out how to report the 1099-R, and get the correct taxable amount to flow to your Form 1040 is for to calculate it and enter it in box 2a of your 1099-R entry. This will result in the correct taxable amount flowing to your Form 1040, line 4b."

Re: Where enter basis in Cash Surrender Value

Ludwik — Mon, 01 Mar 2021 23:07:22 GMT

Thank you. I was stuck and frustrated, so I appreciate your help very much.