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Understanding Form 1099-LS
Form 1099-LS is an IRS information return titled "Reportable Life
Insurance Sale."
A reportable life insurance sale happens when someone sells their interest in a life insurance policy to another party (other than the insurance company itself), and the buyer takes over the policy.
Who must file Form 1099-LS?
You must file Form 1099-LS if you are an acquirer (buyer) that purchases a life insurance contract or any interest in a life insurance contract through a reportable policy sale.
This includes:
- Life settlement providers
- Viatical settlement companies (if the transaction is reportable)
- Investment companies or funds that buy policies
- Brokers or intermediaries who take ownership during the transaction
- Any individual or business acquiring the policy rights from the original policyholder
When is the deadline to file Form 1099-LS?
Here are the IRS deadlines to file 1099-LS for the 2025 tax year.
Seller Copy Deadline
February 2, 2026
Paper filing
March 2, 2026
E-filing
March 31, 2026
Information Required to File Form 1099-LS
Discover the key information needed to file Form 1099-LS easily.
Acquirer Details
Name, TIN, and Address (Include street, city, state, ZIP, country, and phone)
Payment Recipient Details
Name, TIN, and Address (Street address and city/state/ZIP)
Policy Details
Policy Number
Sale & Payment Information
- Amount Paid to Payment Recipient
- Date of Sale
Issuer & Additional Contact Information
- Issuer’s Name
- Acquirer’s Contact Person
- Acquirer’s Additional Address/Phone (if different from Acquirer)
How TaxBandits simplifies your 1099-LS filing
Whether you're reporting to the IRS or sending copies to sellers, TaxBandits takes care of it all.
Easy Data Import Options
Choose the flexible data import options to import your filing data into our system to complete
your filings.
Data Validations
Our system automatically checks your forms against IRS Business Rules to help reduce errors
and rejections.
Seller Copy Distribution
Send seller copies via postal mail, secure online access, or both to stay compliant and file on time.
Free Corrections
If you made a mistake in the form, you can correct it without paying any additional charges.
Solutions Built for Tax Pros & Enterprises
PRO Account
Create a TaxBandits PRO account and seamlessly manage high-volume 1099-LS filings within a secure, cloud-based solution.
API Integration
Integrate TaxBandits with your software to automate W-9 collection, transaction mapping, and IRS filing directly from your existing system.
Frequently Asked Questions On Form 1099-LS
What is a “reportable policy sale”?
A reportable policy sale occurs when a life insurance policy is sold to a buyer who has no substantial family, business, or financial relationship with the insured at the time of purchase.
Do I need to file Form 1099-LS for indirect purchases?
Yes. If you indirectly acquire a policy—for example, by buying an interest in a business, trust, or partnership that owns the policy—it is still a reportable policy sale, and Form 1099-LS must be filed.
Are there any exceptions to file Form 1099-LS?
Yes. You do not need to file Form 1099-LS if:
- The policy was transferred as a gift
- The acquirer is a foreign person
- The transfer qualifies for a Section 1035 exchange
- Another party reports on your behalf under unified reporting rules
What are the penalties for not filing 1099-LS on time?
Failure to file Form 1099-LS on time may result in IRS penalties based on:
- Late filing
- Missing information
- Incorrect TINs
- Intentional disregard
Penalties range from $60 to $680 per form, depending on how late the filing is.
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