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xoxo1273
New Member

I received a 1099–R on money I received from a life insurance policy after my father passed away last year. Do I have to claim that money?

 
2 Replies
DanaB27
Employee Tax Expert

I received a 1099–R on money I received from a life insurance policy after my father passed away last year. Do I have to claim that money?

Yes, if the 1099-R is in your name then you will have to include the 1099-R on your tax return:

  1. Login to your TurboTax Account 
  2. Click on the Search box on the top and type “1099-R”
  3. Click on “Jump to 1099-R”
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I received a 1099–R on money I received from a life insurance policy after my father passed away last year. Do I have to claim that money?

If you received a 1099-R for it...Yes.

 

The major part of the $$ are not usually Federally taxable, but many times the policy accrued dividends between the date of death and when the $$ were distributed.....and those earnings are subject to taxes.  But it's all usually handled cleanly in the boxes on the 1099-R.  States would also tax those same earnings.....I personally don't know if any states would tax the main part....some states do tax inheritance $$, but don't know if that includes insurance $$.  BUT, putting in the 1099-R data, along with the box 7 code, would ID the source of the funds and the state software would handle it appropriately.

____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
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