Will the insurance company deduct any taxes on a life insurance policy? Is the year end taxable?
Will the insurance company deduct any taxes on a life insurance policy? Is the year end taxable?
What sort of payoff, is this a payoff of the interest and principal to the owner, or is it a death benefit.
** the death benefit is not normally taxable.
If you are cashing out a policy that may have a gain (for example whole life or variable policy), any gain in the policy is taxable income. The insurance company will send you a 1099 that details the amount of the gain. The bad news is that if you have a loss, the amount of the loss is NOT deductible.
Ebaines analysis is accurate.
If you are talking about a death benefit, NO income tax is due.
There MAY be some estate tax considerations, but that is not likely.
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