<prompt> Human: Hi all-So my GFs mother passed away earlier this year. She just received the statement for her life insurance payout. Its a 1099-R and it shows 100 of the amount in the taxable income box.Ive heard that its not supposed to be taxed or at most the interest is taxed if it was kept in a fund. Does anyone know what the explanation would be? It ends up being like a 50 tax, its crazy.  <response>: Are you sure its for life insurance? If it was something like an annuity it could be taxableYou mentioned the distribution code was 4 which is for death so if it was life insurance it should definitely not be taxable. I would contact the issuer of the 1099 