Client's father passed away in February. He was receiving NY state retirement benefits. Client just received notice he has a partial month's pension coming as well as group term life insurance benefit. He is asking what if any will be taxable to him. I believe the pension amount may be but the life insurance isn't. Correct?
-
-
Would it be true that if the Group Term Life Insurance Benefit under $ 50K was provided by employer, it "might" be taxable.
Would it be true that if Group Term Life Insurance Benefit in excess of $ 50K and that premium paid by Employee "might not" be taxable.
Just had two issues, where the Group Term Life Insurance Benefit was taxable, as it was employer paid, the beneficiaries did not know of the benefit until the first claims were fliled. In their case the Benefit under Life Insurance was a 100% taxable.
Sandy -
Are you saying a beneficiary of a decedent had taxable income from the proceeds of a group term life insurance policy? That runs counter to IRC §101(a). Gross income does not include amounts paid under a life insurance contract if the amounts are paid by reason of the death of the insured.Originally posted by S T View Post
I believe that is the scenario in the original post.Comment
-
The partial months' pension is probably IRD income and would go on the father's return. I agree, that group term life insurance benefits are not taxable when paid at death. There might be some interest involved, which would be.Originally posted by Justataxguy View PostComment
-
What? Income is taxable to the person (or other entity) to whom it is paid, as long as it is not an "assignment of income." Taxable to the son.Originally posted by BurkeRoland Slugg
"I do what I can."Comment
-
Yes, you are right. I meant to say the estate return.Comment
-
Actually there is more than one possibility as suggested by Roland.Originally posted by Burke View Post
IRC §691(a)
(1) General rule
The amount of all items of gross income in respect of a decedent ... shall be included in the gross income, for the taxable year when received, of:
(A) the estate of the decedent, if the right to receive the amount is acquired by the decedent's estate from the decedent;
(B) the person who, by reason of the death of the decedent, acquires the right to receive the amount, if the right to receive the amount is not acquired by the decedent's estate from the decedent; or
(C) the person who acquires from the decedent the right to receive the amount by bequest, devise, or inheritance, if the amount is received after a distribution by the decedent's estate of such right.Comment
Comment