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Level 2
December 7, 2019
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Client is 100 yrs old, received distribution from her life insurance policy cuz she outlived the term. Is this taxable income? She hasn't died so they ended the policy

  • December 7, 2019
  • 3 replies
  • 21 views
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Best answer by IRonMaN

That's just one of those posts that made me smile.  She beat the actuaries --------- good for her.

3 replies

IRonMaN
IRonMaNAnswer
Level 15
December 7, 2019

That's just one of those posts that made me smile.  She beat the actuaries --------- good for her.

Slava Ukraini!
itonewbie
Level 15
December 7, 2019
Me too :smile::smile:
---------------------------------------------------------------------------------Still an AllStar
itonewbie
Level 15
December 7, 2019

Yes, surrender of life insurance policy for cash value is a taxable event and not a capital gain transaction.  Any gain in excess of cost basis would be taxable as ordinary income.

---------------------------------------------------------------------------------Still an AllStar