At death, a beneficiary receives $10,000. The federal income taxable portion is:

Name: At death, a beneficiary receives $10,000. The federal income taxable portion is:
Brand: Quizplus
Rating: 4.9 (50 reviews)

Question

Quizplus · Accepted Answer

The federal income taxable portion of a death benefit is typically zero, unless the death benefit is paid out over time or as part of a life insurance policy with a cash value component. In this case, the beneficiary is receiving a lump sum death benefit, which is not subject to federal income tax.

At Death, a Beneficiary Receives $10,000