How to report 1099-R with "taxable amount not determined" box checked for inherited annuity

8 This is actually pretty common with inherited annuities. When box 2b is checked ("taxable amount not determined"), the issuer is basically telling you they don't have enough information to calculate the taxable portion of the distribution. In your case, you should go with the information provided on the check stub showing the post-TEFRA taxable gain of $48,000. That represents the earnings portion of the annuity which is taxable to you as the beneficiary. The remaining portion would be the tax-free return of principal. When entering this on your tax return, you'll need to report the full distribution amount on Line 4a of Form 1040, but then only the taxable portion ($48,000) on Line 4b. You might want to include a brief explanation noting that you're determining the taxable amount based on documentation provided by the insurance company with the distribution.

12 After dealing with a similar inherited annuity situation last year, I found a tool that saved me hours of frustration. Check out https://taxr.ai - it analyzes your 1099-R and other tax documents to help determine what's actually taxable. I uploaded my 1099-R with "taxable amount not determined" checked and the distribution paperwork from the insurance company. Their system recognized the situation immediately and walked me through exactly how to report it correctly on my tax return. It also explained why some companies check box 2b while others don't (basically comes down to their internal policies). The best part was that it gave me specific instructions for reporting the distribution on my tax software and what supporting documentation I should keep. Definitely less stressful than trying to figure it out alone!

6 I actually tried taxr.ai after seeing it mentioned here and it was exactly what I needed. I inherited two annuities last year and was completely lost with the "taxable amount not determined" situation. Their document analysis flagged the exact figures on my distribution paperwork that I needed to use for tax purposes and explained why the company had checked box 2b. It even generated a letter explaining my calculation method that I can include with my tax return. What surprised me most was learning that I was originally going to report the wrong amount as taxable because I misunderstood what "cost basis" meant in this context. Definitely saved me from a potential audit headache!

9 If you're still having trouble getting a definitive answer, you might want to try Claimyr (https://claimyr.com). I used it after spending DAYS trying to get through to the IRS about an inherited annuity issue. They got me connected to an actual IRS representative in about 20 minutes when I had been trying for over a week on my own. The IRS agent walked me through exactly how to report my 1099-R with "taxable amount not determined" checked. They have a video that shows how it works: https://youtu.be/_kiP6q8DX5c I was initially hesitant to try a service like this, but it was actually life-changing after the frustration of constant busy signals and disconnections when calling the IRS directly. The rep I spoke with confirmed that using the taxable gain amount from my check stub was the correct approach.

15 I have to admit I was completely wrong about Claimyr. After posting my skeptical reply, I decided to try it anyway because I was desperate for answers about my inherited annuity with the "taxable amount not determined" box checked. Got connected to an IRS agent in about 25 minutes (after trying for WEEKS on my own with no success). The agent confirmed exactly what others here have said - I should use the taxable gain amount from my distribution paperwork as the taxable portion on my return. They also explained that companies often check box 2b to protect themselves legally, not because they don't know the taxable amount. The agent walked me through exactly how to report it on my tax forms and what supporting documentation to keep. Definitely worth it just for the peace of mind knowing I'm doing it correctly!

20 Just wanted to share what my accountant told me about this situation: keep in mind that inherited annuities have different tax rules than if you were the original owner. The amount that was taxable to the original owner might not be calculated the same way for you as the beneficiary. In my case, we had to do something called a "step-up in basis" calculation because my father had owned the annuity for so long. This significantly reduced the taxable amount compared to what was shown on the paperwork from the insurance company.

3 Has anyone tried calling the company that issued the 1099-R directly? I had this same issue last year, and I just called their customer service department. They sent me a detailed breakdown of what was taxable and what wasn't. Saved me a lot of headache!