1099-R Code W

[cmm1]

I have a 1099-R with Code W and showing a distribution in Box 1 and and $0 taxable amount in Box 2.  Pro Series is including the box 1 amount in taxable income.  Why?

[Just-Lisa-Now-]

Not sure Ive seen a Code W before...what does it represent?

[Just-Lisa-Now-]

A code W Form 1099-R reports amounts that are explicitly excludable from income under Section 72(e)(11) of the tax code.   Section 72(e)(11) of the tax code also treats the distribution from the annuity as a nontaxable distribution of basis (to the extent of the basis in the annuity).

If you enter a zero in box 2a, my screen shows that its not counted as taxable income.

[Terry53029]

"Charges / payments for purchasing long term care insurance contracts". I've never saw one, not sure how to handle, would have to research

[cmm1]

It shouldn't be taxable, but it is including as taxable in Line 4c - Pensions & Annuties.  I've tried deleting the 1099-R and re-entering, but it is still showing up as taxable.

[Just-Lisa-Now-]

4c isnt the taxable amount, thats the gross amount,  4d is taxable...whats showing there?

[cmm1 · Accepted solution]

You are correct.  After I deleted and re-entered, it did take it out of 4d taxable.

Thanks!!

[BobKamman]

Coincidentally, my last client had one of these (from Lincoln National Life).  They are generated by annuities that have an LTC insurance component.  She says her agent recently told her she's lucky to have bought it when she did, because they don't sell them anymore.  

[cmm1]

I'm sure that is true!  So many fewer players in the LTC game, not nearly as many options and much more expensive!

Thanks!