life insurance

[jthompso]

What is the name of your state? ohio is there a tax on life insurance? i have heard ohio is very strict on that. its under 30,000 can a tax be avoided if there is one. legally.

 

[LdiJ]

What is the name of your state? ohio is there a tax on life insurance? i have heard ohio is very strict on that. its under 30,000 can a tax be avoided if there is one. legally.

4.9 Interest/Dividends/Other Types of Income: Life Insurance & Disability Insurance Proceeds

Are proceeds paid under a life insurance contract taxable and do they have to be reported as income?

Generally, if you receive the proceeds under a life insurance contract because of the death of the insured person the benefits are not taxable income and do not have to be reported. Any interest you receive would be taxable and would need to be reported just like any other interest received.

However, if the policy was transferred to you for valuable consideration, the exclusion for the proceeds is limited to the sum of the consideration you paid, additional premiums you paid, and certain other amounts. There are some exceptions to this rule. For additional information, call 1 800-829-1040.

That is the answer to your question as far as federal taxes are concerned. Ohio state taxes may have different rules. Consult a local practioner for the answer to that question.