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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

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1 Solution

Accepted Solutions
sjrcpa
Level 15

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


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5 Comments 5
sjrcpa
Level 15

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


Ex-AllStar
BobKamman
Level 15

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.  

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.

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TaxStyle
Level 2

thank you

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sjrcpa
Level 15

You're welcome


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