topic Re: 1099 R in Retirement tax questions

1099 R

Taxhelp42 — Tue, 11 Mar 2025 00:13:40 GMT

I received a 1099-R for a whole life insurance policy that my estranged father apparently took out when I was 2 years old, I never knew this policy existed, I have never contributed to it or received any benefits from it. Since the premiums were not being paid, the policy apparently went into a loan status and closed once the loan exceeded the cash value to which I am now being taxed for loan forgiveness as income apparently. Can I dispute this situation as again I will state I have never contributed or received any funds from this whole life insurance policy that was taken out when I was a toddler?

Re: 1099 R

DavidD66 — Tue, 11 Mar 2025 00:34:43 GMT

If a whole life policy lapsed with no cash value and it resulted in taxable income being reported, it means the policy had an outstanding loan. If you received the Form 1099-R then you were the owner of the policy. If you were the owner of the policy then no one else should have been able to take out a loan on the policy. You need to contact the insurance company. Your only recourse is to go to the insurance company and try to have a corrected Form 1099-R issued with zero taxable income. You can't dispute this on your tax return. If you can't get the insurance company to issue a corrected Form 1099-R you will have to report the income on your tax return.

Re: 1099 R

Taxhelp42 — Tue, 11 Mar 2025 01:31:19 GMT

The ownership apparently automatically changed to me when I turned 21, per the life insurance co. Again, I didnt know this existed until receiving the 1099R, have never contributed or received a distribution, and have not spoken to my "father" in at least 30 years.

So just because I am the "owner" of this whole life policy I can be taxed? How is that legal when I was just 2 years old when he opened it and obviously never agreed to or signed anything.

Re: 1099 R

AmyC — Tue, 11 Mar 2025 01:47:11 GMT

Depending on the amount, it may be worth talking to a lawyer. Unfortunately, a 1099-R with your name on it means taxable income. These accounts do turn over for adulthood - it is meant to be a gift, not a consequence.