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dkm1943
New Member

Surrender life insurance policy

I surrendered a life insurance policy.   Dividends were added to the policies value each year ( per the amount as stated on a yearly 1099 int).  I paid income taxe on those dividends each year.

After cashing in the policy I received a 1099R  which appears to have  made no allowance for the increase in value of the policy due to those dividends.   Since I have paid taxes on those dividends, it appears  I am being taxed twice.

Why is there no way to deduct the value of the dividends ( that have already had income tax paid on them) from the cash value (received)?

3 Replies
Critter
Level 15

Surrender life insurance policy

Contact the issuer for clarification and a corrected for if needed ... however those dividends probably paid part or all of the premiums  instead of increasing the basis in the policy  which is common. 

dkm1943
New Member

Surrender life insurance policy

I do not think so.   It was a whole life policy with premiums fixed for the life of the policy.
Critter
Level 15

Surrender life insurance policy

Ask the payer for more info or a corrected form.
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