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Licensed User
Join Date: Feb 2003
Location: ....down Highway 61
Posts: 6,505
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Tax question: Surrendered a Whole Life policy
I surrendered a Whole life policy for the cash value with no penalties last year. I know there are no free rides so Ive been expecting some kind of 10xx form for the taxes. Ive received nothing to date. How am I supposed to report this? The cash value is taxable, right?
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03-15-2006, 06:38 PM
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Registered
Join Date: Aug 2005
Location: southwest Ct
Posts: 277
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My understanding is the only taxable part is the money made ( interest )
above the cost of expences. So if you had it for ten years, with a expence of seven dollars a month 7*12*10= $ 840. Any interest made above $ 840 would be taxable.
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"The smaller the fine print, the larger the risk." 1988 911 coupe 2008 VW R32 2004 530I |
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03-15-2006, 07:12 PM
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Stay away from my Member
Join Date: Aug 1999
Location: Agoura, CA
Posts: 5,773
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My non-accountant, non-lawyer $0.02 -- IIRC only the capital gains/dividends would be taxable but if they were applied ('reinvested') towards premiums then maybe not. Your original premiums were (I assume) paid w/ after-tax income, so would not be taxed again.
I would double check with your agent or customer service rep whether you should've gotten some kind of 1099. Then again, if it were me and I hadn't gotten a 1099 or W-2 by 1/31 then I'd play dumb.
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Chris C. 1973 914 "R" (914-6) | track toy 2009 911 Turbo 6-speed (997.1TT) | street weapon 2021 Tesla Model 3 Performance | daily driver 2001 F150 Supercrew 4x4 | hauler |
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03-15-2006, 07:15 PM
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