Insurance FAQ
 

Is There Tax On A Life Insurance Policy? ?

Question by Jessica M | Posted in United States

My aunt passed away and through a life insurance policy, through State Farm she left me $5,000. I live in Pennsylvania...If there was tax, how much would I get after taxes? I plan to use the money for my apartment, when I get an apartment and savings...
I live in North East Philadelphia and work in Center City.

Answer: Life insurance proceeds are generally not taxable to the beneficiary.
 
 

How Much Is A Life Insurance Policy Taxed In The State Of Massachusetts?

Question by eric m | Posted in Insurance


Paying $250,000 to the beneficiary . The death has just occured, paying out?
Someone said something about inheritence tax?

Answer: The question is way too vague. Do you mean the benefits, after someone dies? Or the actual ownership of the policy? Or the cash surrender value, if you cancel a policy?

It also depends on the taxable income of the person cancelling the policy, and/or the size of the estate, and who the beneficiary is.

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What Are The Tax Consequences Of A Life Insurance Policy That I Received From A Family Memeber??

Question by CSUflyer | Posted in United States

I received a Form 702 from a small life insurance settlement & am not sure if I will owe any taxes on this. My first & only clue so far is that when running through TurboTax there doesn't appear to be any section to reference or include this inheritence. Please help & let me know how you found it out or where I can find more info. Thank you!!

Answer: This is an estate tax issue. You will not find it in turbotax because turbotax is for income tax only.

If you inherit the policy, then the settlement proceeds are not taxable to you. The original policy holder had already paid his or her share of estate tax, if any.

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Will I Be Taxed On A Life Insurance Policy That I Inherit And If So What Is The Tax Basis?

Question by andrewTX98 | Posted in United States


Answer: Usually there are no taxes owed on life insurance proceeds.

When a person insured by a life insurance policy dies during the term of the policy the proceeds are paid to the beneficiary or beneficiaries.

Life insurance death benefit proceeds are usually not subject to state and federal income taxation. But, if there is no beneficiary, the death benefit proceeds of the life insurance policy may be included in the estate of the deceased. Then, it may be subject to state, federal and inheritance taxes.

Also, the proceeds may be subject to federal estate taxation.

If you own all or part of the life insurance policy at the time of your

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Will I Have To Pay Taxes On Life Insurance Policy From My Father?

Question by BRANDY | Posted in Insurance

My father passed away and my mom received $264,000 from the life insurance policy and gave me 2 checks for $25,000 each. Will she have to pay taxes on the 264k and will i have to pay taxes on the 50k? Thanks

Answer: SHE will have to pay gift tax on the $50,000 she gave you. Most likely, she won't have to pay any tax on the life insurance itself.

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