Matured Life Insurance Endowment

[Yardley CPA]

In this years back-up information, MFJ couple included a copy of a matured life insurance endowment check stub. Distribution was made in February 2014. I realize this should not included on the 2013 return. I'm wondering if it is taxable on the 2014 return. Here's what was on the stub:

Congratulations! We are pleased to provide a check for $48,295.45, which represents the proceeds from your matured endowment.

Source of funds:

$17,518.00 Face Amount Of Insurance

$34,127.96 Paid-up Additional Insurance

$617.14 Termination Dividend

$3,967.65 United States Income Tax Withheld

$48,295.45 Amount of Check

I assume a portion of this is taxable. Will the insurance company issue some sort of 1099 in January 2015?

Thanks very much.

[kcjenkins]

Yes, and it should also send an explanatory cover letter that will tell you more. Clearly since the withheld taxes at least some of it was taxable.

[Yardley CPA]

Thank you, KC.

[joanmcq]

I've got one of these coming for 2014. Got the letter already saying it was being distributed....

[Randall]

There will be a 1099-R. Hopefully, they'll have the gross distribution and taxable amount shown. They should have tracked basis in contract. Hopefully client has kept all annual statements just in case. If the policy is old and has changed insurance companies thru mergers, etc, the insurance company may not be able to provide a good historical statement.