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Old 12-06-2017, 08:44 PM   #1
Deerguy
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Default Is Life Insurance Counted as Income?

Just as the title indicated. I am the beneficiary of a small life insurance policy. I didn't think you needed to claim beneficiary money as income on Federal taxes, but now I think I may have been mistaken. Anybody know for sure?
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Old 12-06-2017, 08:46 PM   #2
Hunter_Man
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Nope. My wife’s first husband passed away and she received a good amount. Did not claim as income. Had an accountant file her taxes and first question she asked.
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Old 12-06-2017, 08:48 PM   #3
doghouse
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Not normally but Trumps new Tax PKG may change that. No clue.
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Old 12-06-2017, 08:56 PM   #4
Shane
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Death benefits paid to beneficiaries are income tax free. The death benefit amount, if the policy was owned by the deceased, would be included in their estate, so there could be estate tax due if the value of the estate is over $5,490,000 (for 2017 deaths). But if the estate was less than that, then no estate tax either (as long as they hadn't made large gifts before death that used up their lifetime exemption).

Lots of caveats, but for the vast majority of folks, there's no tax due on life insurance proceeds. Talk to a CPA about your specific situation if you think there's any chance of an estate tax issue.
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Old 12-06-2017, 09:00 PM   #5
Mohawkman
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Quote:
Originally Posted by Shane View Post
Death benefits paid to beneficiaries are income tax free. The death benefit amount, if the policy was owned by the deceased, would be included in their estate, so there could be estate tax due if the value of the estate is over $5,490,000 (for 2017 deaths). But if the estate was less than that, then no estate tax either (as long as they hadn't made large gifts before death that used up their lifetime exemption).

Lots of caveats, but for the vast majority of folks, there's no tax due on life insurance proceeds. Talk to a CPA about your specific situation if you think there's any chance of an estate tax issue.
This^^^^^ unless the premiums are paid by the business or employer and written off.
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Old 12-06-2017, 09:33 PM   #6
Deerguy
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Good deal, thank you guys.
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Old 12-06-2017, 10:08 PM   #7
Shane
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Quote:
Originally Posted by Mohawkman View Post
This^^^^^ unless the premiums are paid by the business or employer and written off.
That too. And then there's MEC rules.... Plenty of asterisks to go around.
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Old 12-06-2017, 11:57 PM   #8
Atfulldraw
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Quote:
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That too. And then there's MEC rules.... Plenty of asterisks to go around.
dead man walking....

is it seven years?
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Old 12-07-2017, 06:19 AM   #9
TKK
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In vast majority no income tax
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