2920157
You'll need to sign in or create an account to connect with an expert.
You can't do a rollover from a life insurance policy to an IRA.
If you receive a death benefit from someone else, that is not taxable. If you cash (surrender) a life insurance policy for its cash value, that might or might not be taxable, depending on the value and the premiums you previously paid.
Then, you can contribute up to $6000 (or $7000 if you are age 50 or older) to an IRA. This is a contribution, not a transfer or rollover, and is subject to all the usual rules for IRA contributions, including income limits on deductible contributions and the maximum contribution amount per year. If you made deductible contributions you can take a tax deduction for them.
If you took a life insurance check for more than $6000 or $7000, and sent it to the IRA and told them it was a rollover, that is a prohibited transaction and you need to call them right away and reverse what you did.
You will not enter the transaction in TurboTax. When you receive the cash value of the policy, you will then be required to pay taxes on all of the earnings within the policy. This sum of money is represented by the amount of money in excess of the total premiums you’ve paid into the policy. You are then able to use this money to fund an IRA. You will receive Form 5498 which is an information form.
You can't do a rollover from a life insurance policy to an IRA.
If you receive a death benefit from someone else, that is not taxable. If you cash (surrender) a life insurance policy for its cash value, that might or might not be taxable, depending on the value and the premiums you previously paid.
Then, you can contribute up to $6000 (or $7000 if you are age 50 or older) to an IRA. This is a contribution, not a transfer or rollover, and is subject to all the usual rules for IRA contributions, including income limits on deductible contributions and the maximum contribution amount per year. If you made deductible contributions you can take a tax deduction for them.
If you took a life insurance check for more than $6000 or $7000, and sent it to the IRA and told them it was a rollover, that is a prohibited transaction and you need to call them right away and reverse what you did.
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
Acanex
Level 2
Priller
Level 3
manwithnoplan
Level 2
aimspen
New Member
nicebaq
New Member