Proposed rules issued for information reporting for life insurance contract transactions
March 26, 2019 by Sally P. Schreiber, J.D.
The IRS proposed regulations (REG-103083-18) under Sec. 6050Y, which governs reporting obligations for reportable policy sales of life insurance contracts and payments of reportable death benefits. The rules also provide guidance on the amount of death benefits excluded from gross income under Sec. 101(a)(3) following a reportable policy sale. Both provisions were added to the Code by the law known as the Tax Cuts and Jobs Act, P.L. 115-97, and are effective for tax years beginning after Dec. 31, 2017.
Prop. Regs. Sec. 1.6050Y-1 contains definitional provisions. Prop. Regs. Sec. 1.6050Y-2 contains the rules for reporting payments made by the acquirer in a reportable policy sale. Prop. Regs. Sec. 1.6050Y-3 describes how to report the transferor’s investment in the contract by the Sec. 6050Y(b) issuer. Prop. Regs. Sec. 1.6050Y-4 contains the rules for reporting reportable death benefits by the payer.
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