Instructions for Form 1099-SB, Seller's Investment in Life Insurance Contract

• Issuer: Treasury Department
• Section: Treasury Department

Userid: CPM Schema:

instrx

Leadpct: 100% Pt. size: 10 Draft Ok to Print

AH XSL/XML Fileid: … /I1099SB/201912/A/XML/Cycle03/source (Init. & Date) _______

Page 1 of 2 9:56 - 20-Nov-2019

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Instructions for Form

1099-SB

(Rev. December 2019)

Seller's Investment in Life Insurance Contract

Department of the Treasury

Internal Revenue Service

Section references are to the Internal Revenue Code

unless otherwise noted.

Future Developments

For the latest information about developments related to

Form 1099-SB and its instructions, such as legislation

enacted after they were published, go to IRS.gov/

Form1099SB.

Reminders

In addition to these specific instructions, you should also

use the current General Instructions for Certain

Information Returns. Those general instructions include

information about the following topics.

•Who must file.

•When and where to file.

•Electronic reporting.

•Corrected and void returns.

•Statements to recipients.

•Taxpayer identification numbers (TINs).

•Backup withholding.

•Penalties.

•Other general topics.

You can get the general instructions from General

Instructions for Certain Information Returns at IRS.gov/

1099GeneralInstructions or go to IRS.gov/Form1099SB.

Continuous-use form and instructions. Form 1099-SB

and these instructions have been converted from an

annual revision to continuous use. Both the form and its

instructions will be updated as needed. For the most

recent version, go to IRS.gov/Form1099SB.

Online fillable Copies B and C. To ease statement

furnishing requirements, Copies B and C have been made

fillable online in a PDF format available at IRS.gov/

Form1099SB. You can complete these copies online for

furnishing statements to recipients and for retaining in

your own files.

Specific Instructions

This form is used by the issuer of a life insurance contract

(also known as a life insurance policy) to report the

seller’s investment in the contract and surrender amount

with respect to an interest in a life insurance contract

transferred in a “reportable policy sale” or transferred to a

foreign person.

In general, a reportable policy sale is any direct or

indirect acquisition of any interest in a life insurance

contract if the acquirer, at the time of the acquisition, has

no substantial family, business, or financial relationship

with the person insured under that contract, apart from the

acquirer’s interest in such life insurance contract. See

section 101(a)(3). Certain exceptions may apply. See

Regulations section 1.101-1(c)(2). The acquisition of an

interest in a partnership, trust, or other entity that holds an

interest in a life insurance contract may be an indirect

acquisition of that interest in a life insurance contract and

may be a reportable policy sale. See Regulations section

1.101-1(e)(3)(ii).

In general, an issuer is any person that bears any part

of the risk with respect to a life insurance contract and any

person responsible for administering the contract,

including collecting premiums and paying death benefits.

See Regulations section 1.6050Y-1(a)(8)(i). An issuer’s

designee is also considered an issuer. See Regulations

1.6050Y-1(a)(8)(i) and (iv).

A seller is any person that holds an interest in a life

insurance contract and transfers that interest, or any part

of that interest, to an acquirer in a reportable policy sale or

that owns a life insurance contract and transfers title to,

possession of, or legal ownership of that contract to a

foreign person. See Regulations section 1.6050Y-1(a)

(18).

An acquirer is any person that acquires an interest in a

life insurance contract (through a direct acquisition or

indirect acquisition of the interest) in a reportable policy

sale. See Regulations section 1.6050Y-1(a)(1).

Who Must File

Generally, file Form 1099-SB if you are the issuer of a life

insurance contract and either of the following occurs. See

Regulations sections 1.6050Y-3(a) and 1.6050Y-1(a)(8)

(iii).

•You receive a statement from an acquirer in a

reportable policy sale provided under section 6050Y(a),

such as a copy of a Form 1099-LS, Reportable Life

Insurance Sale, reporting the transfer of the life insurance

contract, or an interest therein, in a reportable policy sale.

•You receive, from a source other than the issuer

responsible for administering the life insurance contract

(or its designee), notice of a transfer of the life insurance

contract to a foreign person. In general, notice of a

transfer to a foreign person means any notice that you

receive of a transfer of title to, possession of, or legal

ownership of a life insurance contract that includes foreign

indicia, including information provided for nontax

purposes such as a change of address notice for purpose

of sending statements or for other purposes, or

information relating to loans, premiums, or death benefits

with respect to the contract, unless you know that no

transfer of the contract has occurred or know that the

transferee is a U.S. person. See Regulations section

1.6050Y-1(a)(10). However, if you are not the issuer

responsible for administering the life insurance contract,

including collecting premiums and paying death benefits

under the contract on the date the notice is received, you

Nov 20, 2019 Cat. No. 71419D