if they are death benefit proceeds no. if it is cash value proceeds then any withdrawals over the premiums paid are taxable, any loans on the cash value are not taxable. if it is a hybrid/combo life/long term care policy, then no they are not. all of this is assuming that the policy was paid with after tax dollars, not pre tax.
Usually, life insurance proceeds are free from federal taxes. If the beneficiary is an individual person/persons, the proceeds of a life isnurance policy are tax-free. If the beneficiary of a life insurance policy is the "Estate" of the insured person, the proceeds may be subject to estate taxes.
are paid up insurance proceeds paid to the living person insured taxable
Life insurance proceeds paid to a beneficiary is not taxable. However, if the life insurance beneficiary is a trust or estate, there may be some tax implications.
No. Life Insurance proceeds to beneficiaries are not taxable.
As a general rule, life insurance proceeds from any type of policy are not taxable to the beneficiary. In addition, any loans from cash value are not taxable unless the policy lapses.
There are several factors to consider when determining if life insurance is part of a decedent's probate estate and whether the proceeds are taxable in the US. Taxation of estates is an extremely complex area of law. You should always consult with an attorney and tax expert for advice regarding tax issues.Generally and briefly:If the decedent owned the policy on his/her own life, the insurance proceeds will be a part of the taxable estate (gross estate). However, most estates no longer reach the threshold of taxability regarding the federal estate tax. (If the policy was owned by someone other than the decedent, the insurance proceeds will not be part of the taxableestate.)If the decedent named a beneficiary, the proceeds will be paid directly to the beneficiary, bypassing probate (but remember as stated above the proceeds are considered part of the taxable estate). The proceeds are generally not taxable to the beneficiary.If the decedent did not name a beneficiary, the proceeds will become part of the estate and as such, vulnerable to creditors. The proceeds will be distributed according to the terms of the will or by the laws of intestacy if there is no will.
Insurance proceeds are non-taxable funds no matter how the premiums are paid. In Michigan, insurance proceeds received by a spouse,and only a spouse, are also excluded from household income for the Michigan Homestead Property Tax Credit.
That is the beauty of life insurance! With a properly named beneficiary life proceeds are not taxed and they avoid probate.
"Insurance and Taxes. No. All proceeds or withdrawals from any insurance policy are not taxable." This is not true. If you cancel a life insurance policy, the growth on the cash value IS TAXABLE. If you do not surrender your policy, the money is taken as a loan and therefore not taxable, but interest that has to be paid back to the insurance company grows.
If the policy was paid for with after-tax dollars, the proceeds would not be taxable. If the business took a tax deduction for the policy premiums as a business expense, a tax may be incurred on the death benefit.
To get to the route of what your asking: The amount of the LOSS that is deductible is the unrecovered loss. Hence if you have claimed the entire loss as a deduction the amount of insurance you get is income - because essentially, you overdeducted the loss. If you have made no loss deduction claim, then u=insurance is NOT taxable as it is onlyr returning you to the position you were in before the loss.
Proceeds of an endowment policy is not taxable. Regardless of a person's tax rate, proceeds of an endowment policy is tax free. ?æ