Form 1099-R

Forum|Forum|4 years ago
June 13, 2022
1 reply
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I received Form 1099-R from Lincoln Financial Group regarding the purchased long-term care insurance contract. In Box 1, it shows the gross distribution; in Box 2a, it shows the taxable amount, $0.00; in Box 7, it shows the Distribution code: W, which means "the amount shown as a Gross Distribution in Box 1 is related to "charges or payments for purchasing qualified long-term care insurance contracts under combined arrangements." In Box 8 Other, it shows an amount matched the Box 1. In Box 15, it shows State/Payer's state no.

All other boxes are left blank.

After entering the 1099-R, the TurboTax gives me two choices:

1. You moved the money to another retirement account (or returned it to the same retirement account).

2. You did something else with it (cashed out, etc.).

If choosing 1., two additional questions shown:

1-1. You rolled over all of this money to an IRA or other retirement account (or returned it to the same account).

1-2. You did a combination of rolling over, converting, or cashing out the money.I

None of above questions asked by TurboTax matched my situation. Therefore, I couldn't continue to prepare my

Federal Tax Return unless I choose not to enter this Form 1099-R entirely.

Without filing this Form 1099-R, the IRS considers that I have payment not to report. Therefore, IRS won't process my tax return accordingly.

May I suggest the TurboTax to add additional options to handle the situation: tax payer does not receive any real money from the long-term insurance contract?

Thanks for your assistance.

dmertz

Level 15

You must indicate that you did something else with the money. A code-W distribution is not eligible for rollover or conversion.

Lightfish1024Author

Level 2

Thanks for your reply. Code-W matches none of two options. I did not receive any check from the Long-term care insurance provider and Box 2a shows $0.00 proof that fact. TurboTax should provide the third option: you receive no money from the insurance company. Without the third option, I had to leave this 1099-R blank. However, IRS won't accept that and won't process my tax return. One starts to receive the real money from the long-term care insurance once one could not take care of oneself.

dmertz

Level 15

Code W corresponds to the selection that indicates that you did something else with the money, not the indication that says you moved the money to another retirement account. You used the money to purchase a QLAC.