Proper tax reporting of life insurance death benefit

[Flyboyjohn]

Plan owns a $30,000 face amount life insurance policy with a cash value of $10,000 immediately prior to death

Trustee receives $30,000 proceeds and distributes to plan death beneficiary (decedent's children)

Is the taxable amount $10,000, does the Trustee issue a 1099-R and if so what code applies?

Thanks

[rcline46]

Was the pollicy the ONLY asset in the plan? Strange if it were. If not, then the distribution (and 1099-R) of the cash value - well the cash value is part of the account balance. The amount at risk (20,000) is tax free ONLY IF the ps 58 costs were paid. If PS 58 not paid, then that is taxable also.

[Flyboyjohn]

There are other assets and PS58 costs were reported/paid.

My questions: Is the entire $30,000 in Box 1 (gross) and onyl $10,000 in Box 2 (taxable)?

And what 1099-R distribution code?

Any chance the insurance company will issue the 1099-R?

Thanks

[Guest Fernanda22]

I'm not quiite sure about your query but I found this 2013 1099-R pdf. Moreover, there was a recipient payment included in that pdf.

I hope you find the answer there.

http://www.irs.gov/pub/irs-pdf/f1099r.pdf

[rcline46]

What about the 1099 for the other assets? In this case I see only one 1099-R - total is account balance plus $30,000, taxable account balance plus $10,000.