2007-08-23 13:00:56 · 3 answers · asked by ebillar 1 in Business & Finance ➔ Taxes ➔ Other - Taxes
Answer right from the IRS itself. I've also attached a link to the info from the irs.
Are proceeds paid under a life insurance contract taxable and do they have to be reported as income?
Generally, if you receive the proceeds under a life insurance contract because of the death of the insured person the benefits are not taxable income and do not have to be reported. Any interest you receive would be taxable and would need to be reported just like any other interest received.
However, if the policy was transferred to you for valuable consideration, the exclusion for the proceeds is limited to the sum of the consideration you paid, additional premiums you paid, and certain other amounts. There are some exceptions to this rule. For additional information, call 1 800-829-1040.
2007-08-24 02:13:47 · answer #1 · answered by Anonymous · 0⤊ 0⤋
One of the greatest features of life insurance is that the death benefit is paid tax-free to the beneficiary and it avoids probate.
2007-08-23 22:38:18 · answer #2 · answered by MsMiss 2 · 0⤊ 0⤋
as of right now no.
2007-08-23 20:04:50 · answer #3 · answered by george 2 6 · 0⤊ 0⤋