Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Death Benefit from Life Insurance company

TaxStyle
Level 2

My client's father passed away in 2020. The father had a life insurance and a distribution was sent to my client. 1099R also issued and the recipient's name is my client's name on the form. I am just wondering is this income taxable?

On the 1099R box 2 there is a taxable amount. But base on the article i found on IRS says " 

  • Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them. "

the link: https://www.irs.gov/faqs/interest-dividends-other-types-of-income/life-insurance-disability-insuranc....

 

So I am confused now is this 1099R income taxable or not?

 

Thank you very much for the help

0 Cheers
1 Solution

Accepted Solutions
sjrcpa
Level 15

1099-Rs are not issued for life insurance. This sounds like an annuity. It is taxable.


ex-AllStar

View solution in original post

5 Replies 5
sjrcpa
Level 15

1099-Rs are not issued for life insurance. This sounds like an annuity. It is taxable.


ex-AllStar

View solution in original post

BobKamman
Level 14

And annuities are mostly sold by life-insurance companies.  They're already in the business of predicting life expectancy and investing money for the rest of a customer's life.  

TaxStyle
Level 2

thank you

0 Cheers
sjrcpa
Level 15

You're welcome


ex-AllStar
qbteachmt
Level 15

The good news is, if the deceased had life insurance in addition to the annuity, your client should pursue the rest of their money.

*******************************
"Level Up" is a gaming function, not a real life function.
0 Cheers