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For Senior Taxpayers

Question: I exercised my rights to receive life insurance distributions before death. Are these proceeds taxable?

Answer:

If you surrender a life insurance policy for cash, you must include in income any proceeds that are more than the cost of the life insurance policy. In general, your cost (or investment in the contract) is the total of premiums that you paid for the life insurance policy, less any refunded premiums, rebates, dividends, or loans which were not repaid that were not included in your income. You should receive a Form 1099-R (PDF) showing the total proceeds and the taxable part.  Report these amounts on lines 16a and 16b of Form 1040 (PDF) or on lines 12a and 12b of Form 1040A (PDF).


Category: Other (Alternative Minimum Tax, Estates, Trusts, Tax Shelters, State Tax Inquiries)
Subcategory: For Senior Taxpayers

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The OMB number for this study is 1545-1432.
If you have any comments regarding this study, please write to:
IRS, Tax Products Coordinating Committee
SE:W:CAR:MP:T:T:SP
1111 Constitution Avenue NW
Washington, DC 20224