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Q: How much if any of this $20,000 cash surrender value is taxable and on which schedule do I report this income?
A: The taxable amount will depend if there is an excess amount above the premiums. SEE BELOW:
If the CSV is more than the premiums and you surrender the policy, the excess is earnings and taxable income. For example, if you paid $1,000 in policy premiums for 20 years and you cash in the policy and receive $30,000, you'll pay ordinary income tax on $10,000 in earnings.
You should receive a Form 1099-R showing the total proceeds and the taxable part. Report these amounts on lines 16a and 16b of Form 1040.
Let me know if you require further assistance with this matter.