Instructions For Forms 1099-R And 5498 - Distributions From Pensions, Annuities, Retirement Or Profit-Sharing Plans, Iras, Insurance Contracts, Etc. And Ira Contribution Information - 2016 Page 2


insurance contract; or (b) a contract of endowment
Governmental section 457(b) plans. Report on Form
insurance for another contract of endowment insurance
1099-R, not Form W-2, income tax withholding and
that provides for regular payments to begin no later than
distributions from a governmental section 457(b) plan
they would have begun under the old contract, or for an
maintained by a state or local government employer.
annuity contract, or for a qualified long-term care
Distributions from a governmental section 457(b) plan to a
insurance contract; or (c) an annuity contract for an
participant or beneficiary include all amounts that are paid
annuity contract or for a qualified long-term care insurance
from the plan. For more information, see Notice 2003-20
contract; or (d) a qualified long-term care insurance
which is on page 894 of Internal Revenue Bulletin
contract for a qualified long-term care insurance contract.
2003-19, at Also
A contract shall not fail to be treated as an annuity
see Governmental section 457(b) plan distributions, later,
contract or as a life insurance contract solely because a
for information on distribution codes.
qualified long-term care insurance contract is a part of or a
Nonqualified plans. Report any reportable distributions
rider on such contract. However, the distribution of other
from commercial annuities. Report distributions to
property or the cancellation of a contract loan at the time
employee plan participants from section 409A
of the exchange may be taxable and reportable on a
nonqualified deferred compensation plans and eligible
separate Form 1099-R.
nongovernmental section 457(b) plans on Form W-2, not
These exchanges of contracts are generally reportable
on Form 1099-R; for nonemployees, these payments are
on Form 1099-R. However, reporting on Form 1099-R is
reportable on Form 1099-MISC. Also, report distributions
not required if (a) the exchange occurs within the same
to beneficiaries of deceased plan participants on Form
company, (b) the exchange is solely a contract for
1099-MISC. See the Instructions for Form 1099-MISC for
contract exchange, as defined above, that does not result
more information.
in a designated distribution, and (c) the company
Section 404(k) dividends. Distributions of section
maintains adequate records of the policyholder's basis in
404(k) dividends from an employee stock ownership plan
the contracts. For example, a life insurance contract
(ESOP), including a tax credit ESOP, are reported on
issued by Company X received in exchange solely for
Form 1099-R. Distributions other than section 404(k)
another life insurance contract previously issued by
dividends from the plan must be reported on a separate
Company X does not have to be reported on Form 1099-R
Form 1099-R.
as long as the company maintains the required records.
See Rev. Proc. 92-26, 1992-1 C.B. 744, for certain
Section 404(k) dividends paid directly from the
exchanges for which reporting is not required under
corporation to participants or their beneficiaries are
section 6047(d). Also see Rev. Rul. 2007-24, 2007-21
reported on Form 1099-DIV. See Announcement
I.R.B. 1282, available at
2008-56, 2008-26 I.R.B. 1192, available at
for certain transactions that do not qualify as
tax-free exchanges. For more information on partial
Charitable gift annuities. If cash or capital gain property
exchanges of annuity contracts, see Rev. Proc. 2011-38,
is donated in exchange for a charitable gift annuity, report
2011-30 I.R.B. 66, available at
distributions from the annuity on Form 1099-R. See
Charitable gift annuities, later.
For more information on reporting taxable exchanges,
Life insurance, annuity, and endowment contracts.
see Box 1, later.
Report payments of matured or redeemed annuity,
Prohibited transactions. If an IRA owner engages in a
endowment, and life insurance contracts. However, you
prohibited transaction with respect to an IRA, the assets of
do not need to file Form 1099-R to report the surrender of
the IRA are treated as distributed on the first day of the tax
a life insurance contract if it is reasonable to believe that
year in which the prohibited transaction occurs. IRAs that
none of the payment is includible in the income of the
hold non-marketable securities and/or closely held
recipient. If you are reporting the surrender of a life
investments, in which the IRA owner effectively controls
insurance contract, see Code 7, later. See, however, Box
the underlying assets of such securities or investments,
1, later, for FFIs reporting in a manner similar to section
have a greater potential for resulting in a prohibited
6047(d) for chapter 4 purposes.
transaction. Enter Code 5 in box 7.
Report premiums paid by a trustee or custodian for the
cost of current life or other insurance protection. Costs of
Designated Roth Account Contributions
current life insurance protection are not subject to the 10%
An employer offering a section 401(k), 403(b), or
additional tax under section 72(t). See Cost of current life
governmental section 457(b) plan may allow participants
insurance protection, later.
to contribute all or a portion of the elective deferrals they
Report charges or payments for a qualified long-term
are otherwise eligible to make to a separate designated
care insurance contract against the cash value of an
Roth account established under the plan. Contributions
annuity contract or the cash surrender value of a life
made under a section 401(k) plan must meet the
insurance contract, which is excludable from gross
requirements of Regulations section 1.401(k)-1(f)
income under section 72(e)(11). See Code W, later.
(Regulations section 1.403(b)-3(c) for a section 403(b)
Section 1035 exchange. A tax-free section 1035
plan). Under the terms of the section 401(k) plan, section
exchange is the exchange of (a) a life insurance contract
403(b) plan, or governmental section 457(b) plan, the
for another life insurance contract, or for an endowment or
designated Roth account must meet the requirements of
annuity contract, or for a qualified long-term care
section 402A.
Instructions for Forms 1099-R and 5498 (2016)


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