Irene's husband passed away this year. After his death, Irene received $250,000 of proceeds from life insurance on her husband, and she inherited her husband's stock portfolio, worth $750,000. What amount must Irene include in her gross income?

Question

Quizplus · Accepted Answer

Life insurance proceeds received upon the death of the insured are generally not taxable and do not need to be included in gross income. Similarly, inherited property, such as stocks, is not taxable income to the beneficiary (though there may be implications for capital gains tax when the stocks are sold, based on their value at the time of inheritance). Therefore, Irene does not have to include any of these amounts in her gross income.

Irene's Husband Passed Away This Year