Client received 1099-MISC for $10,000 (box 3 Other Income) that represented a payout on a cancer policy. Reportable? Taxable as other income on page 1 of 1040? Help!
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What Kind of Policy?
First time I've heard of a 1099 for medical payments for an insured.
My guess is that the "cancer" policy was really a combination of
"life" or some other situation where ostensibly the company says
they are insuring for some particular catastrophe, but in reality
is making money by holding excess premiums, i.e. charging much
more than the real risk and providing "cash value" or some other
shell game.
Check it out... -
Sounds like an Aflac policy?
They love to set these up as pretax benefits. If so it would be taxable. Just a guess.Comment
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Cancer Benefits from Policy
I would guess that if something like Aflac and pre tax (payroll deduction pre tax) , then the benefits would be taxable.
If t/p paid premiums out of pocket for cancer policy then non-taxable.
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