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QUESTION DETAIL
Related User
Votes
I recently borrowed from my insurance policy and had to close the policy down. I received a form 1099-R with a taxable amount equivalent to the difference between the loan and the amount of premiums paid. How is this taxed?
ANSWER
The BIDaWIZ Team's Answer:
The difference between the cash surrender value and the premiums paid is treated as ordinary income for tax purposes. Please note that the cash surrender value is calculated as the amount received from the policy less the loan amount.
