Is there tax liability involved if I cash in my life insurance policy?
I am thinking about cashing in my life insurance policy for the current cash value. What kind of taxes will I have to pay? At this point I think that I have paid more in premiums than the cash value.
Answered By: E. Ray Critchett, Zaino & Humphrey, LPA
If your policys cash value consists of your basis in the policy, plus any earnings, you may be taxed on those earnings. This means that if you make a withdrawal over and above your basis in the policy, a portion of the withdrawal may be considered taxable income. I would recommend consulting a tax attorney and/or your CPA prior to cashing in the policy just to ensure that you are fully aware of the potential tax consequences.
You may contact our office to schedule an appointment if you have further questions or if you need assistance with this issue. Thank you.
Answer Applies to: Ohio
Replied: 9/7/2010
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
You may contact our office to schedule an appointment if you have further questions or if you need assistance with this issue. Thank you.
Answer Applies to: Ohio
Replied: 9/7/2010
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
Answered By: Law Offices of James C. Bechler, A.P.C.
Generally, the cash value in a life insurance policy is non taxable.
Answer Applies to: California
Replied: 8/22/2010
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
Answer Applies to: California
Replied: 8/22/2010
Disclaimer: The response above does not form an attorney-client relationship. This answer may or may not apply to you and should not be relied upon as legal advice. LawQA does not make any representation as to the expertise or qualifications of this attorney. This attorney may or may not be admitted to state bar of your state.
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