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?

Question

Quizplus · Accepted Answer

Life insurance proceeds are generally not taxable. Since Don is the beneficiary and paid the premiums, he does not need to include any of the proceeds in his income.

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