The buyer of the policy only reported what they paid to my wife on the 1099 misc.

Since the total amount paid in premiums was higher than the sale price I figure there no tax owed.

Thanks, I guess I just will not report it and and wait for an audit. Maybe they will explain it to me then,since no one there will talk to you on the phone.

I contacted all the parties involved in this sale.They all said that I'd received all the paper work that I'm going to get and that I should report this income ...