The Internal Revenue Service released a set of
The 2017 tax overhaul included some new requirements pertaining to reportable policy sales and payments of reportable death benefits that happen after Dec. 31, 2017. In line with guidance issued by the IRS last April, the proposed rules include transitional guidance postponing any reporting until final regulations are issued. The proposed regs give taxpayers more time to satisfy any reporting obligations for sales or payments they make before the final regulations are published.
Among other changes, the new reporting requirements aim to help taxpayers who sell life insurance contracts report any gain from the sale correctly.
Everyone who buys a life insurance contract, or any interest in a life insurance contract, in a reportable policy sale during the taxable year needs to file a return with the IRS. The acquirer also has to provide written statements to each payment recipient and the issuer named in the return. Once the statement is received, the issuer also needs to file a return with the IRS and provide a written statement to the seller. The IRS has released a
The proposed rules also provide offer guidance on new reporting requirements for each person who makes a payment of reportable death benefits (on Form 1099-R) and how to compute the amount of death benefits excluded from gross income.
