Question

Do I need to claim proceeds from a sale of life insurance stock that was issued to me when I sold my life insurance policy?

Forum|Forum|4 years ago
February 20, 2022
1 reply
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I cashed out my life insurance policy decades ago and was issued shares of stock as well. I sold those shares last year. Do I have to claim the proceeds on my tax return?

TurboTax Premier Online

JohnB5677

Yes, think of this as two different transactions.

You sold your Life Insurance Policy. You should have paid the tax for that.
You bought shares of stock. This has basis that you will not pay tax on again because you bought it with the life insurance money.
When you sell the stock you will incur capital gains tax on the value above the basis.

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