The return of the premiums from the life insurance is not taxable but if there is interest included in the payments, that is taxable. You would need to separate out the premiums from the interest (if you are able to). Here is how to report.
- Federal
- Income and Expenses
- Scroll down to Less Common Income and click Show More
- Start next to Miscellaneous Income
- Start next to Other Reportable Income
- For description type "1099 MISC for Life insurance Proceeds and then the amount
- In the Box below that write non-taxable life insurance and then record the amount with a minus sign in front of the amount.
Remember, if any of the amount you receive has interest, you will need to subtract that from your settlement. The remainder will then reported as non-taxable in the last bullet point described above.
@Wkdwch @tk134
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