IRS Finalizes Regulations on TCJA Reporting Requirements for Life Insurance Contract Transfers, Nov. 7, 2019

The IRS has released final regulations governing the new reporting requirements that apply to life insurance contracts transferred in a reportable policy sale post-tax reform. Generally, a purchaser of a life insurance contract (or interest in one) in a reportable policy sale must file a return with the IRS and provide certain statements to the recipient of payment and the insurance carrier. The final regulations provide significant transition relief, and make clear that no reporting is required under section 6050Y for reportable policy sales made and reportable death benefits paid after December 31, 2017, and before January 1, 2019. Additionally, issuers have at least 120 days from October 31, the date the final rules were published in the Federal Register, to file necessary returns and provide required informational statements. For more information on the specific reporting requirements that will apply under IRC Section 6050Y going forward, visit Tax Facts Online.