!035 Exchange and 1099R

[JuJuT]

I rolled over life insurance one to another. I have 1099-R and 1035 exchange. I entered 1099R to turbo tax but how to enter for 1035 exchange? I don't need to enter? I saw number 6 on section 7 on my 1099R. My question is I just rolled over my life insurance why I have to pay taxes this year?

[Mike9241 · Accepted solution]

6—Section 1035 exchange (a tax-free exchange of life insurance, annuity, qualified long-term care insurance, or endowment contract. this is all that's needed code 6 in box 7

so you shouldn't be taxed but that requires line 2a of the 1099R to show zero or be blank

the amount will appear on 5a but not 5b (the taxable amount) 

[JuJuT]

Thank you for helpful answer. I checked my 1099R there is $0 on section2 and there is no A and B on section 5 with cash surrender amount. In this case, anyhow I have to pay back taxes?

[JulieS · Accepted solution]

No, if your 1099-R shows $0 in box 2 and "6" on box 7, it won't be taxed. 

You do have to enter the 1099-R in your tax return. This is how to do that:

1. Open your return select Federal then Wages and Income.
2. Find IRA, 401(k), Pension Plan Withdrawals (1099-R), on the list, click Start to the right. 
3. Answer the first question Yes.
4. Click Continue. 
5. At this point you can import your 1099-R, if it is from one of our partners or,
6. Scroll down the bottom and select, Change how I enter my form. 
7. On the next screen, select Type it in myself, in the lower right corner.
8. Select 1099-R on the next screen and click Continue.
9. Enter your 1099-R on the next few screens. 
10. Answer all of the follow up questions. 

[JuJuT · Accepted solution]

Thank you so much for answering instruction. I'm following your step and I saw a question 3 is 

Have you ever taken a disaster distribution before 2022? Is this question should i answer yes? 

I'm using free edition, so I don't see your instruction 6. Scroll down the bottom and select, Change how I enter my form. should I upgrade my edition?