Do I have to pay income taxes on a life insurance payout?
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5 Responses
1.31.2010
Best Answer – Chosen by Voters I read your question a bit differently.If you are meaning that your grandfather purchased a life insurance policy on YOU, when you were born, and you recently surrendered the life insurance policy, which you owned, then there would be income taxes only on the excess of surrender value over the premiums paid.I am guessing, in all likelihood, that your grandfather purchased a whole life insurance policy. In that case, I highly doubt that the surrender value exceeded the total premiums paid, and, therefore, I would conclude that there are no income tax liabilities from surrendering the life insurance policy for the cash surrender value.Phillip S Foster CPADave Ramsey Endorsed Local Providerhttp://www.phillipfostercpa.com/money.ht…
1.31.2010
Maybe yes maybe no.The devil is in the details. Ask the insurance company.
1.31.2010
Hi there is no state or federal taxes on a death claim. Only estate taxes ( not normally a issue)Alan Sindep agent.
1.31.2010
If you were paid the face value because grandpa died, no. It's not taxed.
1.31.2010
I know I didn't have to pay taxes on mine because it was life ins. I'm not sure if there is a cap on how much though.