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Ludwik
Level 2

Where enter basis in Cash Surrender Value

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.

1 Best answer

Accepted Solutions
ToddL99
Expert Alumni

Where enter basis in Cash Surrender Value

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."

 

 

View solution in original post

6 Replies
ToddL99
Expert Alumni

Where enter basis in Cash Surrender Value

What was the distribution code in Box 7?

Ludwik
Level 2

Where enter basis in Cash Surrender Value

Box 7 has a "7" in it.

ToddL99
Expert Alumni

Where enter basis in Cash Surrender Value

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

 

Ludwik
Level 2

Where enter basis in Cash Surrender Value

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

ToddL99
Expert Alumni

Where enter basis in Cash Surrender Value

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."

 

 

View solution in original post

Ludwik
Level 2

Where enter basis in Cash Surrender Value

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

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