Question
Life Insurance Surrender - On a 1099 MISC
My client received a 1099-MISC with $50,000 in box 3 (Other Income). Here are the facts:
1. The 1099 was from his fathers company
2. The company had purchased a life insurance policy on him years ago
3. His father is still alive, the company just determined they no longer needed the policy
4. The policy was for $150K and had earned $60K. The company kept the $60K and split the $150K between my client and his siblings (their father is well off and didn't need the money)
Is this total amount taxable and reported as "Other Income" on his 1040?
