Simplify Form 1099-LS reporting for proceeds from the sale of life insurance policies. With 1099Online, you get built-in TIN-matching, bulk import, recipient copy delivery, and secure eFiling in one platform.
Form 1099-LS, Reportable Life Insurance Sale, is an IRS information return used to report when a life insurance policy (or an interest in one) is sold in a reportable policy sale. The buyer (acquirer) must file this form with the IRS to report the transaction.
The form covers both direct and indirect acquisitions, including acquisitions made through a partnership, trust, or other entity that holds an interest in a life insurance contract.
The acquirer in a reportable policy sale must file Form 1099-LS. An acquirer is any person who buys a direct or indirect interest in a life insurance contract in a reportable policy sale.
Filing exceptions apply in specific cases: gratuitous transfers, certain foreign persons, section 1035 exchanges, and situations where a third party or another acquirer files under the unified reporting provisions of Regulations section 1.6050Y-2(b).
Use Form 1099-LS to report any acquisition of a life insurance contract, or an interest in one, in a reportable policy sale. A sale qualifies as reportable when the acquirer has no substantial family, business, or financial relationship with the insured.
Reportable acquisitions include:
File a separate Form 1099-LS for each payment recipient in the transaction.
The IRS has not announced any direct changes to Form 1099-LS for the 2026 tax year. The current April 2025 instructions continue to apply. However, two broader filing updates are worth noting.
Starting with filing season 2027, IRIS replaces FIRE as the IRS intake system for all information returns. The OBBBA's $2,000 threshold increase applies to certain forms but does not affect Form 1099-LS.
If you are the acquirer in a reportable policy sale, you are generally required to file Form 1099-LS. File a separate form for each payment recipient per transaction.
Before filing, gather the following:
Once you have the details ready, here is what to do next:
If the sale is rescinded after filing, file a corrected Form 1099-LS within 15 calendar days of receiving notice. The same 15-day rule applies to corrected statements furnished to the payment recipient and issuer. Late, incorrect, or missing returns may trigger IRS information return penalties. Keep documentation for all transactions and any corrections filed.
Businesses filing Form 1099-LS should keep the following IRS deadlines in mind for the 2026 tax year:
| Filing Requirement | Deadline |
|---|---|
| Furnish Copy B to the payment recipient | February 28, 2027 |
| File paper forms with the IRS | March 1, 2027 |
| eFile forms with the IRS | March 31, 2027 |
When a due date falls on a Saturday, Sunday, or legal holiday, the deadline is automatically extended to the next business day.
1099Online is an IRS-authorized eFile provider that offers a simple way to file Form 1099-LS online. Choose your preferred data entry or import method, complete your form, and transmit it securely to the IRS.
Step 1: Enter Policy Sale Information
Enter the required Form 1099-LS information manually or import your data using your preferred method. Add payment recipient, issuer, and policy details, including the policy number, date of sale (Box 2), and amount paid to the payment recipient (Box 1).
Step 2: Opt In to Recipient Copy Distribution
Choose to have 1099Online distribute Copy B to recipients by postal mail or PDF download.
Step 3: Review and Transmit
Review your filing summary and submit your Form 1099-LS securely to the IRS.
If you have already filed Form 1099-LS and later receive notice that the sale was rescinded, file a corrected Form 1099-LS within 15 calendar days of receiving that notice. The same 15-day rule applies to corrected statements furnished to the payment recipient and the issuer.
Form 1099-LS has no minimum dollar threshold. The IRS requires this form for any reportable policy sale, regardless of the amount paid. Filing is triggered by the transaction type, not the payment amount.
Late, incorrect, or missing Form 1099-LS filings may result in IRS penalties under IRC Sections 6721 (for filing with the IRS) and 6722 (for furnishing recipient statements). For Tax Year 2026 filings (filed in 2027), the penalties are expected to be $60 per return if corrected within 30 days, $130 per return if corrected by August 1, and $330 per return if corrected after August 1 or not filed, with a higher penalty of $660 per return for intentional disregard.
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