VA Life Insurance is not taxable, as long as the beneficiary of the policy is not the "estate". When life insurance proceeds are left to the estate, they are taxable, whether issued by the Veterans Administration or from a private source. But life insurance proceeds left to a person or group do not generally incur income tax.
VA Life Insurance is also subject to estate tax if the amount of the death benefit, added to the value of the estate, exceeds the exempted amount. Only the excess is taxed with estate taxes, and the federal exemption is 5.25 million this year. Some states have state estate (inheritance) taxes and some don't.
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VA Life Insurance is also subject to estate tax if the amount of the death benefit, added to the value of the estate, exceeds the exempted amount. Only the excess is taxed with estate taxes, and the federal exemption is 5.25 million this year. Some states have state estate (inheritance) taxes and some don't.