Life Settlement Tax Information
Life Settlement Tax Information
If the life settlement amount is less than the tax basis of the policy, there is not a tax liability. Generally, any amount received in excess of tax basis is taxable as ordinary income, capital gains, or both.
If the cash surrender value of the policy exceeds the policy’s tax basis, the difference between the cash surrender value and the tax basis will be taxed as ordinary income. The difference between the cash surrender value and the settlement amount may be taxed as a capital gain.
The individual tax circumstances of each client needs to be considered and you should reply upon you own enquiries as to such.
For more tax implication and information call toll free at 1-888-973-8377 or fill out our online policy evaulation form.
