Form 1099-LS: Reporting a Reportable Life Insurance Sale
Published November 8, 2026
Form 1099-LS reports a reportable life insurance sale. The filer is the acquirer. The acquirer is the person that buys an interest in a life insurance contract in a reportable policy sale. The form reports the amount paid for the interest and the date of the sale.
This post is general information from the IRS form and its instructions. It does not say whether a particular sale is reportable. It does not give tax advice for a particular taxpayer. Related reading: Life Insurance Payouts: When Are They Taxable?
What counts as a reportable policy sale
The instructions say a reportable policy sale is generally any direct or indirect acquisition of an interest in a life insurance contract. This applies when the acquirer has no substantial family, business, or financial relationship with the insured. That relationship is measured apart from the acquirer's interest in the contract. Certain exceptions may apply. Read the exceptions in the instructions before you decide.
An acquisition through a partnership, trust, or other entity can be an indirect acquisition. The instructions say that may count as a reportable policy sale.
Who must file
Generally, the acquirer files Form 1099-LS. You may not have to file in some cases. Examples include a gift of the interest and an exception in the regulations. Another acquirer may file for you. So may a third-party reporting contractor, under the unified reporting rules.
Before you file
Gather the sale documents before you start the form. Confirm the policy number, the issuer name, and the date of the sale. Confirm the amount paid to the payment recipient.
Check that each recipient has a correct name, address, and taxpayer identification number. If you have questions about the exceptions, read the instructions first. The instructions name the regulation section for each exception.
Keep a copy of each statement you send. Write down the date you sent it. This record helps if a corrected statement is needed.
Who receives statements
The instructions describe three roles. A payment recipient is any person that receives a reportable policy sale payment, and it can include a seller. The issuer is the company that issued the life insurance contract. The form has a copy for the payment recipient, Copy B, and a copy for the issuer, Copy C.
The acquirer must generally furnish a statement to each payment recipient and to the issuer. The table in the instructions shows which copy goes to which recipient.
What the boxes ask for
Box 1 is the amount paid to the payment recipient. Box 2 is the date of the reportable policy sale. The form also asks for the policy number. It asks for the acquirer's name and address. It also asks for the taxpayer identification numbers of the parties.
If the sale is rescinded
If a sale is rescinded after you filed Form 1099-LS, the instructions say you must furnish a corrected statement. It goes to the recipient or issuer within 15 calendar days of receiving notice of the rescission.
Electronic filing
If you have 10 or more information returns, you may have to file electronically. The instructions say the IRS lowered the e-file threshold to 10. Check the General Instructions for Certain Information Returns for due dates and the other filing rules.
Mistakes to avoid
- Assuming a sale is not reportable without reading the relationship test in the instructions.
- Missing a corrected statement after a rescission.
- Filing on paper when the electronic filing rule applies.
- Using the wrong copy for the payment recipient or the issuer.
Keep the sale agreement, the policy number, the date of the sale, and the copies you sent. Read the current instructions before each filing season.
Sources: Sources: IRS, Form 1099-LS, Reportable Life Insurance Sale; Instructions for Form 1099-LS (Rev. April 2025) (https://www.irs.gov/pub/irs-pdf/i1099ls.pdf); General Instructions for Certain Information Returns (https://www.irs.gov/pub/irs-pdf/i1099gi.pdf) This is general information, not advice about your specific return.
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