Question

1099R Life Insurance Questions

Forum|Forum|5 years ago
May 5, 2021
1 reply
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So I have a question regarding my life insurance1099R with these info:

Box1: 100

Box 2a: 0

Box 2b: Blank

Box 7: W (charges or payments for purchasing qualified long-term care insurance contracts under combined arrange)

IRA/SEP/SIMPLE: is NOT checked

Box 8 (Other): 100

I have the downloaded/CD version (if that matters)

I have questions regarding the questions that Turbotax asks after filling out the 1099-R and clicking "Continue". After verifying a few things, I get to this question

>>> What did you do with your money from <Life Insurance> Company?

It seems to have two options

I moved the money to another retirement account (or returned it to the same retirement account)/
I did something else with it (cashed out, etc)

It seems both cases could be valid as long as it makes sense.

For example, if I pick option 1, then it will ask me to choose two options:

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

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

Of course option 1 seems to make sense to me since the "distribution" is being sent back to the same account to pay for the long-term care (code W)

Clicking continue will return

>> You won't have to pay tax on your $100 rollover from <Life Insurance> Company

Now if I pick option 2 above which is

>>> I did something else with it (cashed out, etc) ---- seems turbotax needs more examples than the "etc"

Click continue and it will ask for the periodic payments

>>> Yes, I got regular payments from this retirement account

>>> No, I didn't get regular payments from this retirement account

Of course, I pick No.

In either cases, there is no additional tax. However, does it matter which options I select?

I moved the money to another retirement account (or returned it to the same retirement account)/
I did something else with it (cashed out, etc)

What is the implication of either selections that I described above?

It seems option 1 makes more sense to me since I actually never saw the money and the insurance company uses it to pay for the long term life care thing.

The only thing is I remember picking option 2 last year for 2019 tax. I picked option 1 this year with the selections I mentioned above.

Appreciate the help!

ColeenD3

You said, "However, does it matter which options I select?" Yes. You need to answer every question asked in the program accurately. The software is a tool to get you to the correct end result. If you took the money and spent it, say so.

S

statusquoAuthor

Thanks for your help! I think the website flagged this as a spam after I made a few edits so this is a duplicate of https://ttlc.intuit.com/community/taxes/discussion/re-1099r-life-insurance-questions/01/2258946

@ColeenD3 wrote:
You said, "However, does it matter which options I select?" Yes. You need to answer every question asked in the program accurately. The software is a tool to get you to the correct end result. If you took the money and spent it, say so.

I do understand that part. However, the distribution from the insurance company was being used to pay for long term care but the way it's done is that the insurance company itself used that money and paid it, which never involved me. I never received that distribution. When I picked the choice that says I rolled over the amount (or returned to the same retirement account), this seemed to make sense since it was being used to pay for the long term care (using the same account). It can be reasoned that I could pick "I did something else with it (cashed out, etc)" but I never received the fund to pay for it. On either cases, I didn't need to pay tax and Turbotax flagged that the rollover cannot be used for 1099R with code W, so I ended up picking