We received a death benefit from my husbands uncle but it was a life insurance benefit, annuity, lump sum of $50000 but we had to add it to our income?

[lapierre]

we received a 1099 but were not thinking we needed to add it to our income? our uncle had paid taxes on this benefit monthly and the life insurance company already took 10% for fed taxes , why would we need to add this to our income?

[MinhT · Accepted solution]

Life insurance death benefits are not taxable. But annuity death benefits do not pass to beneficiaries tax-free.

You have to report the form 1099-R that you received on your tax return.