BanditAI
What is Form 1099-SB?
Form 1099-SB, Seller's Investment in Life Insurance Contract, is an IRS information return filed by the issuer of a life insurance contract when:
- A policy is sold in a Reportable Policy Sale (RPS), or
- The contract is transferred to a foreign person
Who is required to file Form 1099-SB?
Form 1099-SB must be filed by the issuer of a life insurance contract upon receiving notice of a reportable policy sale or a transfer of the contract to a foreign person. This includes:
- Life insurance companies
- Plan administrators are responsible for managing the contract
- Any designated entity acting on behalf of the issuer
1099-SB Deadlines for the 2025 Tax Year
Staying ahead of these deadlines is non-negotiable. Late filings cost between $60 and $340 per form.
| Seller Copy Distribution | Paper Filing with IRS | Electronic Filing with IRS |
|---|---|---|
| February 17, 2026 | February 28, 2026 | March 31, 2026 |
If you received notice of a reportable policy sale close to or after the standard deadline, a 30-day rule from the date of notice
may apply under Regulations section 1.6050Y-3(c).
Information Required to File Form 1099-SB
Discover the key information needed to file Form 1099-SB easily.
Issuer Information
Name, address, and TIN of the insurance contract issuer.
Seller Information
Seller’s name, address, and TIN.
Policy Values
- Seller's total investment in the contract (cost basis, including all premiums paid)
- Surrender value of the policy immediately before the sale
- Cash value of the policy immediately before the sale
The Bandit Commitment
Ensuring the right outcome for every 1099-SB you file.
Filing Form 1099-SB demands more than just submitting a form—it requires clean data, thorough validation, and a process built for the right outcome.
The Bandit Commitment is TaxBandits' promise to keep your filing accurate, compliant, and fully supported—from the first entry to final IRS acceptance and seller copy delivery.
Getting the right data in
Every Form 1099-SB starts with validated, error-free data—because accuracy at the point of entry means fewer issues down the line.
Guided, end-to-end compliance
From capturing reportable policy-sale details to delivering seller statements, TaxBandits manages every step to ensure your obligations are fully met.
No-cost corrections & retransmissions
If your form 1099-SB is rejected or requires corrections, you can update and resubmit it at no additional cost.
Money-back guarantee
If the IRS rejects your form or flags it as a duplicate, your filing fee may be refunded. Because a filing that doesn't go through shouldn't cost you.
How to File Form 1099-SB with TaxBandits
TaxBandits provides a structured, guided workflow for accurately reporting life insurance policy sales in full compliance with the IRS,
from data entry to final submission.
Prepare forms with ease
No more second-guessing fields or chasing down policy values at the last minute.
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Flexible Data Import:
Bring in issuer and seller information via CSV upload or directly through your accounting software integration.
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Guided preparation:
Structured prompts walk you through every required field, from seller details to policy information.
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Secure Data Storage:
All filing data is stored securely for easy access, status tracking, and future reference.
Validate your data for accuracy
Our system validates your Form 1099-SB data at every stage, catching errors before they reach the IRS.
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Built-In Data Validations:
Automatically identify missing TINs, incorrect values, and data inconsistencies before submission.
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Pre-Submission Smart Review:
Review flagged alerts and resolve issues in advance to ensure a clean, accurate filing and higher IRS acceptance rates.
E-file with the IRS & distribute seller copies
Submit your Form 1099-SB securely to the IRS and furnish seller copies — all in one streamlined step.
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Secure Transmission:
Your data is encrypted and transmitted securely to the IRS, no paperwork, no postage, no hassle.
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Immediate IRS Acknowledgment:
Receive an IRS acknowledgment for your submission within 1 business day—no waiting around.
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Seller Copy Distribution:
Furnish seller copies via postal mail, secure online access, or both.
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No-Cost Amendments:
Need to make a correction? Amendments and retransmissions are covered at no additional cost under the Bandit Commitment.
FAQs
Frequently Asked Questions about Form 1099-SB
A reportable policy sale (RPS) occurs when a life insurance policy, or an interest in it, is transferred to another party for valuable consideration.
In simple terms, when someone buys a life insurance policy from another person rather than from an insurance company, it qualifies as an RPS and triggers 1099-SB filing requirements.
Late filing penalties range from $60 to $340 per form, depending on how late the form is filed.
Penalties for intentional disregard increase to $680 per form, with no maximum limit.
Learn more about 1099 penalties.
Both forms are used to report life insurance policy sales, but serve different purposes.
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Form 1099-SB (Seller’s Investment in Life Insurance Contract):
- Purpose: Reports the seller’s investment (cost basis) in the policy
- Filed by: The insurance company (issuer)
- Includes: Premiums paid and policy-related values
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Form 1099-LS (Reportable Life Insurance Sale):
- Purpose: Reports the sale transaction and the amount paid to the seller
- Filed by: The buyer (acquirer)
- Includes: Sale proceeds, buyer, and seller details
The IRS uses both forms together to determine the seller’s taxable gain and ensure accurate reporting of income from life insurance policy sales:
- Taxable Gain = Proceeds (Form 1099-LS) – Investment (Form 1099-SB)
The IRS uses these values to determine how the policy sale may affect the tax treatment of any future payouts from the contract. Inaccurate values here can cause downstream tax complications for the seller.
Yes! A copy must be furnished to the seller by February 15th. Failure to do so carries the same penalty structure as late IRS filing.
Success Starts With TaxBandits
An IRS Authorized E-file Provider You Can Trust!
