Reporting of Payments by Acquirer in a Reportable Policy Sale

Instructions for Form
1099-SB

Department of the Treasury
Internal Revenue Service

(Rev. December 2019)

Seller's Investment in Life Insurance Contract
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
Nov 20, 2019

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

Cat. No. 71419D

section 1.6050Y-1(a)(7). Accordingly, with respect to any
seller other than the original policyholder, the issuer’s
obligation to report the seller’s investment in the contract
on any date will be limited to the information that is known
to the issuer.

are not required to file Form 1099-SB if you or your
designee provide the issuer responsible for administering
the life insurance contract (or its designee) with such
notice and with any available information necessary to
accomplish reporting on the Form 1099-SB. See
Regulations section 1.6050Y-1(a)(8)(iii)(B). You may not
have to file Form 1099-SB if you qualify for an exception in
Regulations section 1.6050Y-3(f) or if another issuer or
third party information reporting contractor reports on your
behalf under the unified reporting provisions of
Regulations section 1.6050Y-3(b). You may qualify for an
exception in Regulations section 1.6050Y-3(f) if the seller
is a foreign beneficial owner, if you receive notice of a
transfer to a foreign person but did not receive a written
statement from an acquirer reporting the transfer as a
reportable policy sale, or you received a written statement
from an acquirer reporting your issuance of a life
insurance contract in a section 1035 exchange as a
reportable policy sale.
Enter your name, address, telephone number, and TIN.
Additionally, enter the name and telephone number of
your information contact, if different from your own. This
contact information must provide direct access to a
person who can answer questions about this information
return. The information contact may be a call center
providing access to a person who can answer such
questions.

Surrender Amount

In general, the surrender amount is the amount the seller
would have received from the issuer responsible for
administering the life insurance contract if the seller had
surrendered the life insurance contract to the issuer on the
date of the reportable policy sale or the transfer of the
contract to a foreign person. See Regulations section
1.6050Y-3(a)(3).

Statement to Seller

If you are required to file Form 1099-SB, you must furnish
a statement or acceptable substitute to the seller, such as
Copy B of Form 1099-SB. For more information about the
requirement to furnish a statement to the seller, see part
M in the current General Instructions for Certain
Information Returns.
The issuer's information contact name must be
provided in the appropriate box. The individual
CAUTION named must be familiar with the reporting
requirements of reportable policy sales.

!

Truncating recipient’s TIN. Pursuant to Regulations
section 301.6109-4, all filers of this form may truncate the
seller’s TIN (social security number (SSN), individual
taxpayer identification number (ITIN), adoption taxpayer
identification number (ATIN), or employer identification
number (EIN)) on statements furnished to a seller (Copy
B). Truncation is not allowed on any documents the filer
files with the IRS. An issuer’s TIN may not be truncated on
any form. See part J in the current General Instructions for
Certain Information Returns.

Reporting

You must file a separate Form 1099-SB for each seller of
an interest in a life insurance contract with respect to
which you received a statement provided under section
6050Y(a) or for each seller of a life insurance contract with
respect to which you received notice of a transfer to a
foreign person. Enter the name, address, and TIN of the
seller; the policy number of the life insurance contract; the
seller’s investment in the contract; and the surrender
amount.

Rescission of Reportable Policy Sale

Policy Number

If a reportable policy sale or transfer of an insurance
contract to a foreign person is rescinded and you have
filed Form 1099-SB with respect to the reportable policy
sale or transfer, you must file a corrected Form 1099-SB
within 15 calendar days of the receipt of notice of the
rescission. If a reportable policy sale or transfer of an
insurance contract is rescinded and you have furnished a
statement with respect to the reportable policy sale or
transfer to a seller, you must furnish the recipient of the
statement with a corrected statement within 15 calendar
days of the receipt of notice of the rescission. See
Regulations section 1.6050Y-3(e).

The policy number is the unique identifying number
assigned to the life insurance contract by the issuer
responsible for administering the contract.

Seller’s Investment in the Contract

Investment in the contract means, with respect to the
original policyholder of a life insurance contract, the
aggregate amount of premiums or other consideration
paid for the contract, less the aggregate amount received
under the contract, to the extent that such amount was
excludable from gross income. See Regulations section
1.6050Y-1(a)(7)(i). With respect to any other person,
investment in the contract means estimate of investment
in the contract, which is the aggregate amount of
premiums paid for the contract by that person, less the
aggregate amount received under the contract by that
person, to the extent such information is known to or can
reasonably be estimated by the issuer. See Regulations

Box 1. Investment in Contract

Enter the seller’s investment in the contract.

Box 2. Surrender Amount

Enter the surrender amount.

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Instructions for Form 1099-SB (Rev. 12-2019)