What are the taxes owed on a death benefit from a life insurance policy?

Question

400000

Answer 1

Zero, as long as the estate isn't the beneficiary.

If the estate is the beneficiary it will be added to the value of the estate and if the value of the estate is above the exemption amount there will be estate tax due on the entire estate, including the value of the life insurance payout.

Answer 2

It depends.

If the Estate isn't the beneficiary, none, regardless of the amount.

If the Estate is the beneficiary, it is added to the total estate, and the tax amount is on the estate as a whole, not just the policy benefit. It could still be zero, or the total tax could be paid with the benefit because it is cash, rather than expecting real property to be sold to pay the liability.

If the policy of 400k is the sole asset of the estate, the estate tax liability will be zero for federal purposes, and zero for the state in MOST states.

Answer 3

$zero