Instructions For Forms 1099-R And 5498 - 2015 (Page 2 of 23) in pdf

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

rider on such contract. However, the distribution of other

Nonqualified plans. Report any reportable distributions

property or the cancellation of a contract loan at the time

from commercial annuities. Report distributions to

of the exchange may be taxable and reportable on a

employee plan participants from section 409A

separate Form 1099-R.

nonqualified deferred compensation plans and eligible

These exchanges of contracts are generally reportable

nongovernmental section 457(b) plans on Form W-2, not

on Form 1099-R. However, reporting on Form 1099-R is

on Form 1099-R; for nonemployees, these payments are

not required if (a) the exchange occurs within the same

reportable on Form 1099-MISC. Also, report distributions

company, (b) the exchange is solely a contract for

to beneficiaries of deceased plan participants on Form

contract exchange, as defined above, that does not result

1099-MISC. See the instructions for Form 1099-MISC for

in a designated distribution, and (c) the company

more information.

maintains adequate records of the policyholder's basis in

Section 404(k) dividends. Distributions of section

the contracts. For example, a life insurance contract

404(k) dividends from an employee stock ownership plan

issued by Company X received in exchange solely for

(ESOP), including a tax credit ESOP, are reported on

another life insurance contract previously issued by

Form 1099-R. Distributions other than section 404(k)

Company X does not have to be reported on Form 1099-R

dividends from the plan must be reported on a separate

as long as the company maintains the required records.

Form 1099-R.

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

ar15.html

for certain transactions that do not qualify as

irb/2008-26_IRB/ar11.html.

tax-free exchanges. For more information on partial

exchanges of annuity contracts, see Rev. Proc. 2011-38,

Charitable gift annuities. If cash or capital gain property

2011-30 I.R.B. 66, available at

irb/

is donated in exchange for a charitable gift annuity, report

2011-30_IRB/ar09.html.

distributions from the annuity on Form 1099-R. See

For more information on reporting taxable exchanges,

Charitable gift annuities, later.

see Box 1, later.

Life insurance, annuity, and endowment contracts.

Prohibited transactions. If an IRA owner engages in a

Report payments of matured or redeemed annuity,

prohibited transaction with respect to an IRA, the assets of

endowment, and life insurance contracts. However, you

the IRA are treated as distributed on the first day of the tax

do not need to file Form 1099-R to report the surrender of

year in which the prohibited transaction occurs. IRAs that

a life insurance contract if it is reasonable to believe that

include, or consist of, non-marketable securities and/or

none of the payment is includible in the income of the

closely held investments, in which the IRA owner

recipient. If you are reporting the surrender of a life

effectively controls the underlying assets of such

insurance contract, see Code 7, later. See, however,

securities or investments, have a greater potential for

box 1, later, for FFIs reporting in a manner similar to

resulting in a prohibited transaction. Enter Code 5 in

section 6047(d) for chapter 4 purposes..

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 excludible from gross income

requirements of Regulations section 1.401(k)-1(f)

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.

insurance contract; or (b) a contract of endowment

Distributions allocable to an in-plan Roth rollover

insurance for another contract of endowment insurance

(IRR). The distribution of an amount allocable to the

that provides for regular payments to begin no later than

taxable amount of an in-plan Roth rollover (IRR), made

they would have begun under the old contract, or for an

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Instructions for Forms 1099-R and 5498 (2015)

Instructions For Forms 1099-R And 5498 - 2015 Page 2

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