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

[IRonMaN · Accepted solution]

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

[itonewbie]

Me too :smile:

[itonewbie]

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.