Greg is the owner and beneficiary of a $100,000 policy on the life of his mother.Greg gives the policy to his brother,Don.Don subsequently pays premiums of $40,000.Upon his mother's death,how much of the insurance proceeds must Don include in income?

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Quizplus · Accepted Answer

Life insurance proceeds are generally not taxable income to the beneficiary. Since Don is the beneficiary and the proceeds are from a life insurance policy, he does not need to include any of the $100,000 in his income, regardless of the premiums he paid.

Greg Is the Owner and Beneficiary of a $100,000 Policy