I have a client who received a 1099 r from northwestern mutual life insurance. The amount in box1 is 3455.28 and box2a is 1352.71 which is the taxable amount. Am I missing something. I though life insurance proceeds were not taxable. Can someone explain this to me.
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Could it be
Could it be an annuity contract and not a Life Insurance Contract?
Difference would be the original investment in box 1 and earnings in Box 2a
Sandy -
Thanks
Box 5 has 2,102.57 which is employee contributions/ designated roth contributions or insurance proceeds. Thanks for the help Sandy.Comment
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Sandy is right. It could be an annuity contract which has basis. But it could also be a life insurance contract where proceeds exceeded premiums paid in. That was put into effect a number of years ago by the IRS on surrenders.
Not on death proceeds of life insurance, which remain tax-free.Comment
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