IRS describes new tax reform information reporting requirements for certain life insurance contract transactions and provides transitional guidance delaying reporting until final regulations are issued

IR-2018-104, April 26, 2018

IR-2018-104, April 26, 2018

WASHINGTON –– The Internal Revenue Service today described the new information reporting requirements for certain life insurance contracts under new IRC 6050Y, which was added by the Tax Cuts and Jobs Act (TCJA).

WASHINGTON –– The Internal Revenue Service today described the new information reporting requirements for certain life insurance contracts under new IRC 6050Y, which was added by the Tax Cuts and Jobs Act (TCJA).

The new reporting requirements apply to reportable death benefits paid and reportable policy sales made after Dec. 31, 2017. As part of today’s guidance, however, the Internal Revenue Service provided transitional guidance delaying any reporting under IRC 6050Y until final regulations are issued. The transitional guidance provides taxpayers additional time to satisfy any reporting obligations arising prior to publication of final regulations.  

The new reporting requirements apply to reportable death benefits paid and reportable policy sales made after Dec. 31, 2017. As part of today’s guidance, however, the Internal Revenue Service provided transitional guidance delaying any reporting under IRC 6050Y until final regulations are issued. The transitional guidance provides taxpayers additional time to satisfy any reporting obligations arising prior to publication of final regulations.  

A “reportable policy sale” is generally the acquisition of an interest in a life insurance contract, directly or indirectly, if the acquirer has no substantial family, business, or financial relationship to the insured.  A “reportable death benefit” is an amount paid at the death of the insured under a life insurance contract that was transferred in a reportable policy sale.

A “reportable policy sale” is generally the acquisition of an interest in a life insurance contract, directly or indirectly, if the acquirer has no substantial family, business, or financial relationship to the insured.  A “reportable death benefit” is an amount paid at the death of the insured under a life insurance contract that was transferred in a reportable policy sale.

The Internal Revenue Service requested public comment on intended proposed regulations implementing these reporting requirements. Complete details can be found in Notice-2018-41.

The Internal Revenue Service requested public comment on intended proposed regulations implementing these reporting requirements. Complete details can be found in Notice-2018-41.

The Treasury media contact for this matter is Marisol Garibay, Deputy Assistant Secretary for Public Affairs, 202-622-6490. More information regarding the TCJA can be found on IRS.gov.

The Treasury media contact for this matter is Marisol Garibay, Deputy Assistant Secretary for Public Affairs, 202-622-6490. More information regarding the TCJA can be found on IRS.gov.

Research & References of IRS describes new tax reform information reporting requirements for certain life insurance contract transactions and provides transitional guidance delaying reporting until final regulations are issued|A&C Accounting And Tax Services
Source