Death Benefit

[moonpetty58]

Decedent's representative received two Death Benefit checks from insurance company.  Should they be listed as income on 1041?

[IRonMaN]

If you mean they got two life insurance settlement checks, they aren't taxable.  However, any interest paid along with the life insurance proceeds are taxable.  Were the checks actually made out to the estate or to beneficiaries?

[moonpetty58]

These two checks were made out to the estate of decedent (in Decedent's name, in care of  representative.  

[moonpetty58]

MADE OUT TO THE ESTATE.

[IRonMaN]

The insurance proceeds aren't taxable to the estate, but any interest included in the payments are.

[sjrcpa · Accepted solution]

Are you sure they were life insurance? One point of having life insurance is that you name a beneficiary and it stays out of your estate. The beneficiary designation is done when you buy the policy.

Insurance companies sell other products which may result in taxable income. Were 1099-Rs issued?