My mom received $60,000 from my dad's life insurance policy. Does she need to claim this as income? She did not receive a 1099-MISC from the insurance company. Additionally, the insurance company did mail a Form 712 Life Insurance Statement. Does my father's estate have to file a tax return?
The life insurance proceeds are not taxable to your mom since life insurance premiums are paid with post-tax income.
I recommend you consult a tax adviser or estate attorney to determine whether your father’s estate needs to file a tax return, as there are many factors to consider.
For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.
Answered by: Amy M. Swartzfager, CPA, is a senior tax analyst with API Technologies Corp. in Fairview, Pa.