Tax deduction for a cancelled Life Insurance Policy
My wife and I just turn 70 1/2 which means we are no longer allowed to contribute to our Traditional IRAs. Our insurance agent convinced us to use our RMD's to set up a life insurance policy on my wife. A year later, I determined that the policy didn't do what I had thought it would, and the premium of $13,000+ was all used up, we were supposed to make additional yearly contributions of the premium with after tax monies. Looking down the line, the return would not have made us the money, I was expecting. So we decided to take our lumps rather than continue with the premiums. The entire amount of $13,000+ is gone. It appears to me that we should be able to take the loss or at least a part of it, as a tax deduction. Form 1099R, is used to asses taxes on distributions from pensions, life insurance proceeds, etc.
What are your thoughts and how do we proceed?