A life insurance policy of 200,000 that is in an insurance trust was cashed in. the gain made on the policy was $116,000.
10 percent was withheld at the time of cash in. the trust will now owe the balance when the return is filed.
1. Is this gain ordinary income taxed at the maximum trust rate of 37 percent.
or is this gain capital gain income taxed at 20 percent.
2. the policy was cashed in in january 2018. does the entire tax liability have to be paid as an estimated tax in april 2018?
thank you for any help.....
Carol
10 percent was withheld at the time of cash in. the trust will now owe the balance when the return is filed.
1. Is this gain ordinary income taxed at the maximum trust rate of 37 percent.
or is this gain capital gain income taxed at 20 percent.
2. the policy was cashed in in january 2018. does the entire tax liability have to be paid as an estimated tax in april 2018?
thank you for any help.....
Carol
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