Received full distribution of my own surrendered life insurance from a foreign country.

Forum|Forum|1 year ago
April 9, 2025
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I received full distribution of my own surrendered life insurance from a foreign country. Previously, a TT tax adviser said that I should put it under "Misc income" section. However, with further reading and research, shouldn't I put this distribution under 1099-R and also fill out form 4852 as TT software asked me to do after I filled out the 1099-R section?

Ask the Experts - Tax Due - April 2025

RobertB4444

Since this is foreign income entering it as a substitute 1099-R or as 'Other Income' actually won't make any difference to how much you are taxed. It also won't change your ability to claim the foreign tax credit if you paid any foreign taxes on this income. So the 'Other Income' route is just faster and easier.

@WenHN

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WenHNAuthor

Thank you.

Should I make a note somewhere in that "Other Income" section that will show: total distribution - premium cost = taxable amount (gained/appreciated)?

RobertB4444

You can. You could make two entries - one a positive amount for the total amount received and one a negative amount for the premium cost so that only the net shows up as taxable income. But either way you need to retain all of your records in case you are ever questioned about this.

@WenHN

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