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Client is 100 yrs old, received distribution from her life insurance policy cuz she outlived the term. Is this taxable income? She hasn't died so they ended the policy

jennifersue444
Level 1
 
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IRonMaN
Level 15

That's just one of those posts that made me smile.  She beat the actuaries --------- good for her.

Barber! Why didn't I think of this before? Getting paid to give out bad tax advice - need I say more? I've run with scissors for years so it is a natural fit.

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IRonMaN
Level 15

That's just one of those posts that made me smile.  She beat the actuaries --------- good for her.

Barber! Why didn't I think of this before? Getting paid to give out bad tax advice - need I say more? I've run with scissors for years so it is a natural fit.

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itonewbie
Level 15
Me too :smile::smile:
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itonewbie
Level 15

Yes, surrender of life insurance policy for cash value is a taxable event and not a capital gain transaction.  Any gain in excess of cost basis would be taxable as ordinary income.

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