Updated October 19, 2026. Quick answer: Form 1099-LS is the statement an acquirer gives you when you are paid in a reportable policy sale of a life insurance contract. Box 1 shows the amount paid to you and box 2 shows the date of sale. This page covers what the form says and does not work out any tax result.
What Form 1099-LS reports
The form is titled Reportable Life Insurance Sale, and Copy B goes to the payment recipient. The instructions on that copy open with who sends it: “An acquirer of a life insurance contract or any interest in a life insurance contract in a reportable policy sale under section 6050Y must give this form to you for payments made to you in the reportable policy sale.”
So the person who bought an interest in the policy is the one who issues the form, and the person who was paid receives it. The seller of the policy is one kind of payment recipient, and the instructions say the term can reach others: “A payment recipient may include any seller in the reportable policy sale” as well as “any broker or other intermediary that retains a portion of the cash or other consideration transferred in the reportable policy sale.”
What a reportable policy sale is
The acquirer’s instructions give the general definition. “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.”
The same passage adds that “Certain exceptions may apply.” If you are unsure whether your own sale is covered, the form you received is the best evidence that the acquirer treated it as reportable. The sibling statement that goes to the insurance company on the other side of the sale is described in Form 1099-SB boxes 1 and 2.
What each item on the form shows
The payment recipient’s instructions walk through the items, and the table below sets them out.
| Item on the form | What the form says |
|---|---|
| Policy number | “Shows the policy number the life insurance company assigned to the life insurance contract.” |
| Box 1 | “Shows the amount paid to you in the reportable policy sale under section 6050Y.” |
| Box 2 | “Shows the date of sale.” |
| Issuer’s name | “Shows the insurance company that bears the risk with respect to the life insurance contract on the date a Form 1099-LS is required to be furnished to that issuer.” |
| Acquirer’s contact information | “The contact information provided will give you direct access to a person who can answer questions about this form.” |
Box 1 is the amount paid to you, and box 2 is the date of the sale. Neither sentence tells you what part of the amount is income or what it cost you, so this form alone does not settle your return. For how life settlement proceeds are treated, see how life settlement proceeds are taxed, and for the choice between selling and surrendering, see life settlement versus surrender.
Your taxpayer identification number on the form
The form may not print your whole number. “For your protection, this form may show only the last four digits of your TIN”. The same paragraph adds that “the acquirer has reported your complete TIN to the IRS.” A shortened number on your copy is therefore not a sign of a reporting error.
Copy B, Copy C and the insurance company
The acquirer sends two different copies. The filer instructions give the rule in a short table: the payment recipient gets Copy B and the issuer gets Copy C. The issuer’s copy states why it arrives: “If you are the issuer, Copy C is provided to you because you have an information reporting obligation under section 6050Y(b).” “You must file a Form 1099-SB with respect to the reportable policy sale under section 6050Y.”
Box 1 is treated differently on the issuer’s copy. The acquirer’s instructions say “The acquirer is not required to report this information to the issuer of the life insurance contract.” “Reporting the amount paid to the payment recipient is therefore optional on Copy C.” That means your copy and the insurance company’s copy can look different even for the same sale.
If the sale is rescinded
A sale can be undone after the form is sent. The acquirer’s instructions provide for it: “If a reportable policy sale is rescinded and you have furnished a statement with respect to the reportable policy sale to a payment recipient or issuer, you must furnish the recipient of that statement with a corrected statement within 15 calendar days of the receipt of notice of the rescission.” If you receive a form marked corrected, compare it with the first one before using either. The broader topic is covered in the life insurance decisions guide.
Edition and box numbers
This page reads Form 1099-LS (Rev. April 2025), the current file irs.gov served on 2026-10-19. The Instructions for Form 1099-LS (Rev. April 2025) are read as well, and they say “Use these instructions for tax year 2025 and subsequent years until a superseding revision is issued.” Check the year and edition printed on the form you received before relying on any box description here, because box numbers can change between editions. Only one edition is used for this page.
Common mistakes
- Assuming the shortened number on your copy means the IRS lacks your full number. The form says “the acquirer has reported your complete TIN to the IRS.”
- Expecting the insurance company’s copy to match yours line for line. The instructions say “Reporting the amount paid to the payment recipient is therefore optional on Copy C.”
- Taking a blank contact box to mean no contact is available. The form says “If blank, the contact information is the same as the ACQUIRER.”
Related: how life settlement proceeds are taxed, life settlement versus surrender, and the life insurance decisions guide.
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Answer againSources
- Form 1099-LS, Reportable Life Insurance Sale (Rev. April 2025), with Instructions for Payment Recipient: https://www.irs.gov/pub/irs-pdf/f1099ls.pdf
- Instructions for Form 1099-LS (Rev. April 2025): https://www.irs.gov/pub/irs-pdf/i1099ls.pdf
- IRS: About Form 1099-LS: https://www.irs.gov/forms-pubs/about-form-1099-ls
Read from the IRS documents linked above on October 19, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.