- quote -

You know, that is a good idea. Thank you for the suggestion.

Jennifer

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

- quote -

Good questions, Harlan, but yes, he received the insurance
proceeds in 2005.

- quote -

No mention of this by the client. He is actually pretty
knowledgable of his taxes, he just doesn't have time to
prepare them himself this year. This is the first year he
hasn't done them. I think he's savvy enough to have told me
if this was the case.

- quote -

You have raised enough doubt in my mind that I am just going
to go ahead and call the company. :-)

Jennifer

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Jennifer D wrote:

- quote -

Well now. IF there IS a "taxable amount", there should be a
tax statement as you indeed surmise, like a 1099R.

Did client receive the amount in 2004? Or might it have
been as late as January 2005, in which case no 1099R might
be forthcoming until next year?

OR, since this is a life insurance policy, maybe the dividends went
back in to purchase more insurance, in which case there IS no taxalbe
event.

Anyway, doesn't sound like it would even be subject to 1099R
reporting. Therefore we can't know for certain what the
meaning of "taxable amount" might even be.

ChEAr$,
Harlan Lunsford, EA n LA
1 Apr 2005

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

Jennifer D wrote:

- quote -

Call the company via their toll free number and ask them to
explain the statement. The line item called Indebtedness
appears to be unrepaid loans. Any unrepaid loans are used
to adjust basis as are any unreported dividends. It's highly
likely that the $5201 is the correct taxable amount.

--
Alan
http://taxtopics.net

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

I have read the back posts on including insurance proceeds
where TP cashed the policy in, but I still have some
questions.

Of course, the insurance company did not send TP a 1099-R.
I read on the group to include the proceeds less the
adjusted basis.

TP's check stub says:

Cash Surrender Value $1817.65
Cash Value of Dividends $4547.06
Less
Indebtedness $3919.59
Taxable Amount $5201.99

TP told me that he paid $5/month for 20 years as premium.

I cannot with any certainty determine how the company
arrived at the taxable amount. My best guess is $4547.06
(dividend as a return of premium) less basis ($1200)=
$3347.06 plus $1817.65 = $5164.70.

So, I put in 16a the proceeds, $5201.99 and in 16b $5201.99
less $1200 = $4001.99?

Thanks.

Jennifer DeBoer

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->