life insurance payout

Forum|Forum|6 years ago
February 9, 2020
3 replies
35 views

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TurboTax Home & Biz Windows

Best answer by DawnC

Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them.

However, any interest you receive is taxable and you should report it as interest received. See Topic 403 for more information about interest.

If the policy was transferred to you for cash or other valuable consideration, the exclusion for the proceeds is limited to the sum of the consideration you paid, additional premiums you paid, and certain other amounts. There are some exceptions to this rule. Generally, you report the taxable amount based on the type of income document you receive, such as a Form 1099-INT or Form 1099-R.

For additional information, see Publication 525, Taxable and Nontaxable Income and Are the Life Insurance Proceeds I Received Taxable?

To enter your 1099-R in TurboTax, click this link. @PapaDub1

AlanT222

Level 15

Life insurance payouts are not taxable. You do not have to report life insurance proceeds on your income tax return.

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PapaDub1

Level 2

I had a life insurance policy "mature", had to take a distribution and received a 1099-R with a taxable amount on it. How is it that you say life insurance payouts are not taxable?