Has anyone actually gone through with surrendering a policy like this? What forms did you need to file with your tax return? I'm in a similar situation with a policy worth about $140k and surrender charges of $35k, so I'm trying to prepare for the paperwork nightmare.

This is exactly the kind of situation where you really need professional guidance, but I understand the frustration of waiting for your accountant meeting while losing sleep over it! One thing that might help ease your mind - yes, you're unfortunately correct that you'll be taxed on the full $190k even though you'll only receive $138k after surrender fees. The IRS treats the policy transfer as taxable compensation at the moment of transfer, regardless of what happens afterward. However, there might be some silver linings to explore with your accountant. Since you're being taxed on $190k but only receiving $138k in cash, the difference could potentially be treated as a loss in certain circumstances. This depends heavily on how your "basis" in the policy is calculated and whether the surrender qualifies under specific sections of the tax code. Before surrendering, definitely explore the option of reducing the death benefit instead of full surrender - this often dramatically reduces premiums while avoiding those brutal surrender charges entirely. You might be able to make the policy manageable rather than losing $52k to fees. Document everything from your employer, the insurance company, and any communications about the transfer. You'll need this paper trail to properly calculate your basis and avoid any potential issues with the IRS down the road.

I went through this exact situation on February 28th of this year. Called and verified my identity after never receiving the letter. The representative told me everything was good to go, but my transcript and WMR didn't update until March 15th - that's 16 days later. Then my refund was deposited on March 22nd. The most frustrating part was calling back on March 7th when nothing had changed, and being told by a different rep that my verification hadn't been properly processed. Had to go through the whole verification process again! I recommend calling back on April 27th if you don't see any changes, just to confirm the verification was properly recorded in their system.

I'm going through this EXACT same nightmare right now! Verified my identity over the phone 8 days ago and my transcript is still completely blank - it's like my tax return fell into a black hole. The rep assured me everything was good on their end, but clearly their system didn't get the memo. What's really frustrating is that I've been checking my transcript obsessively every morning like it's some kind of lottery ticket. The waiting is killing me because I need this refund to pay off my student loans before the grace period ends. Has anyone tried calling back to double-check that the verification was actually processed correctly? I'm wondering if I should wait the full 2-3 weeks or call sooner to make sure there wasn't a glitch. This whole system feels like it's held together with digital duct tape!

Has anyone used TurboTax for filing with the Danish Double Taxation Agreement? I'm in a similar situation but unsure if their international tax support is good enough or if I need to find a specialized preparer.

I went through this exact same situation last year with a Danish employer! One thing that really helped me was getting a copy of the "Erklæring om skattemæssigt hjemsted" (Certificate of Tax Residence) from the IRS. This is a form that proves you're a US tax resident, which you can submit to your Danish employer to potentially reduce the withholding rate under the treaty. Also, make sure you understand the difference between the 22% your employer is withholding and what Denmark is actually entitled to under the treaty. For employment income, Denmark can tax it since you're working for a Danish company, but the US gets to tax it too since you're a US resident. The treaty just ensures you get credit for the Danish taxes paid when filing your US return. One more tip - keep excellent records of exactly when you performed work and where. If you ever traveled to Denmark for work meetings or training, that could affect how the income is sourced under the treaty. The IRS Publication 901 has a good overview of US tax treaties that helped me understand the basics before diving into the Denmark-specific provisions.

Has anyone actually gotten money back from SBTPG after all this? I've been fighting with them for 10 MONTHS over a $4,200 refund they claim they sent back to the IRS. IRS says they don't have it. I've filed all the forms, done the trace, called hundreds of times... still nothing. I'm about ready to file a lawsuit but don't know if it's even worth the money.

I'm going through almost the exact same situation right now! Filed in February through TurboTax, bank account issues led to SBTPG getting my refund, and they've been giving me the runaround for months. They've told me my check was "in the mail" at least 6 times now with different dates each time. Reading through all these responses is really helpful. I had no idea about requesting the EFT refund notification letter - that sounds like crucial evidence to have. I'm definitely going to call and ask for that today using the exact phrase Oscar mentioned. @Hannah - have you had any luck getting through to the IRS recently? I've been trying for weeks but the hold times are insane. Might have to try that Claimyr service everyone's talking about since I can't afford to spend entire days on hold. The most frustrating part is that SBTPG acts like they're doing you a favor by eventually maybe sending your own money back. It's ridiculous that tax prep companies can partner with these banks that basically hold your refund hostage. There should be better regulations around this whole process.

Anyone have experience with how this all gets reported on your tax forms? Like which specific forms and schedules do you need to fill out when you exercise options and then later sell at a loss?

This is a really helpful thread - I'm dealing with a similar situation but with one additional wrinkle. I exercised ISOs in early 2023 at a $200k valuation, but the company actually ended up shutting down completely in late 2023 before going public. So my shares are essentially worthless now. From what I'm reading here, I still owe AMT on the original $200k spread, but when I "sell" the worthless shares (or they're deemed worthless), I should be able to claim the full amount as a capital loss. The tricky part is figuring out exactly when and how to claim that loss - do I need to wait for some official declaration that the company is dissolved, or can I claim it as soon as it's clear the shares have no value? Also wondering if anyone knows whether worthless stock gets treated differently than stock sold at a loss for AMT credit purposes. This whole situation has been a tax nightmare!