Gain on cash surrender value

[Janitor Bob]

Client received a letter from Prudential regarding the gain on cash surrender value of a life insurance policy. The Cash Surrender value was $1,490.17...Cost basis was $472.07....so , according to the letter, the taxable gain is $1,016.69. Since less than $5,000.00 and policy was issued prior to August 12th, 1982, Prudential will not be issuing a 1099-R.

Question....How and where do I report this gain...Sch D, 1099-R, 1099-MISC?

[OldJack]

Who is the taxpayer/client that received the letter?

Are you talking about a cash basis individual taxpayer or a business?

Did the client actually receive the proceeds of the policy?

Did the client receive 1099s to report income during prior years of the policy?

Janitor Bob, you know better than to leave out such important information on a question.

[B. Jani]

Line 21 other income. if you use ATX, then bunny hop and see "Dividend on insurance policy in excess of premium:.

If other software, just put it is other ordinary income.

I am surprise why prudential is not issuing 1099.

Hope this helps.

B Jani

[RoyDaleOne]

I would fill out a fake 1099R resulting in the amount being on Line 16a, or some other method so the amount goes on LIne 16a.

I see no difference in reporting whether you receive a 1099R or not.

[Janitor Bob]

Who is the taxpayer/client that received the letter?

Are you talking about a cash basis individual taxpayer or a business?

Did the client actually receive the proceeds of the policy?

Did the client receive 1099s to report income during prior years of the policy?

Janitor Bob, you know better than to leave out such important information on a question.

Sorry Old Jack...It was almost 2:00am when I posted this....barely awake.

Client is an individual. Client did recieve 1099's in prior years for very small amounts of income.

I was just sueprised that Prudential did not want to issue a 1099-R in this case.

I filled out a "fake" 1099-R to include taxable amount in her income.

[OldJack]

>>Client received a letter from Prudential regarding the gain on cash surrender value of a life insurance policy. <<

If the client did not receive the "cash" from the policy there should be no taxable income. This letter would just be like a statement of the account.