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Get your taxes done using TurboTax
You'll be taxed on the amount you received minus the policy basis, or the total premium payment you made on the policy. The difference between the total premiums paid and the total surrender value will be taxable income. You will receive a form 1099 from your handling agency which will provide guidelines on how to report the income.
It's ordinary income, not capital gain. while some states exempt retirement distributions, this probably won't qualify in those states.
‎January 26, 2024
9:39 AM