Long Term Care

Nothing in the tax code is straightforward or easy to understand, and that's especially true when it comes to life insurance with all the caveats, exceptions and treatments.To begin with, at death, proceeds from a life insurance policy are not taxable income, unless of course, the policy was turned over to the taxpayer for a price – then you may encounter some issues. It's a good idea to check with a tax professional to ensure that the transaction is being handled properly for tax purposes, otherwise, the beneficiary does not have to worry about declaring the proceeds as taxable income.Oftentimes the proceeds from the insurance policy may accrue interest between the date of death and the actual date of remittance—and that is taxable income. You will likely receive a Form 1099-INT from the insurance company at year end, make sure you include this amount on your income tax return. The benefit check may also include a return of premium, but this is normally not taxable income.If you have ...

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