Where enter basis in Cash Surrender Value

Forum|Forum|5 years ago
March 1, 2021
6 replies
45 views

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.

Best answer by ToddL99

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

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."