Question

Taxes paid on life insurance gain?

Forum|Forum|6 years ago
January 24, 2020
1 reply
0 views

My wife and I cashed out her life insurance policy in 2019. We received a 1099-R for the the gain. Over the years I have included the interest from the statements received from the insurance company each year as income. Is this total gain taxable as 2019 income? I feel like I have already paid taxes on the gain.

V

VictorW9

Usually, a taxable gain occurs when you cash out from a life insurance policy. The taxable amount of the gain realized is the difference between the cash value of the policy and the net premium cost.

In other words, your basis is the amount of premiums you have paid into the policy less any dividends or withdrawals you gave taken.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"