Is Life Insurance Federally Taxable?
0 POINTSContact Meview profileDavid RacichPROFountain Hills, ArizonaLife insurance proceeds are generally paid to the policy's beneficiaries tax free. But proceeds that are left in the estate of the beneficiaries could be subject to estate taxation on the federal and state level if the total assets (including the life insurance) exceed the unified credit or state exemptions.Answered on July 21, 2013+01+1 this answer
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63333 POINTSview profilePeggy MaceMost of the U.S.Life insurance is federally taxable if the sum of the life insurance proceeds plus the value of the estate (Gross Estate) exceeds the federal estate tax guidelines. This year, $5,250,000 is exempted from estate taxes. If your estate is larger than that, you may want to transfer ownership of your life insurance to an Irrevocable Life Insurance Trust.Answered on July 21, 2013flag this answer
11783 POINTSContact Meview profileLarry GilmorePROAgent Owner, Gilmore Insurance Services, Marysville, Washington StateIs life insurance federally taxable? Depends. Life insurance usually is not subject federal income taxes as long as it is used and funded in the standard way. Life insurance cash values can be subject to income taxes if over funded creating a modified endowment contract. Some life premiums can be set up pre tax that create a taxable death benefit. There is a possibility of state and federal estate taxes depending on the size of the estate and ownership of the policy.Answered on February 6, 2016+01+1 this answer 0flag this answerview more answers by Larry Gilmore
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