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William Brenner
Guest
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 Posted: Sun May 18, 2008 1:12 am Post subject: Taxable Life Insurance Dividends |
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A letter from a major life insurance company begins with (their words)
"Good news", and goes on to explain that a very old whole life policy
has reached the point where the total dividends received have equaled
all of the premiums paid.
The "good news" continues with the explanation that the above means that
$600+ of this year's $1100+ dividend will be taxable income. (The tax
can be deferred by purchasing additional paid up insurance, which I
choose to not do.)
The question is: Is this Line 21 Other Income? If not, where is it
entered on Form 1040?
Thank you.
Bill
--
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William Brenner
Guest
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| Posted: Sun May 18, 2008 4:07 am Post subject: Re: Taxable Life Insurance Dividends |
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William Brenner wrote:
| Quote: |
A letter from a major life insurance company begins with (their words)
"Good news", and goes on to explain that a very old whole life policy
has reached the point where the total dividends received have equaled
all of the premiums paid.
The "good news" continues with the explanation that the above means that
$600+ of this year's $1100+ dividend will be taxable income. (The tax
can be deferred by purchasing additional paid up insurance, which I
choose to not do.)
The question is: Is this Line 21 Other Income? If not, where is it
entered on Form 1040?
Thank you.
Bill
It just occurred to my tired brain that, as it is a DIVIDEND, Schedule B |
might be a another possibility. I suppose it would be too much to
expect that it would be a "qualified" dividend.
What say thee?
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >> |
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Han
Guest
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| Posted: Sun May 18, 2008 12:43 pm Post subject: Re: Taxable Life Insurance Dividends |
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William Brenner <wbrenner@nospamplease.net> wrote in
news:MWNXj.35707$7a.20893@bignews1.bellsouth.net:
| Quote: |
William Brenner wrote:
A letter from a major life insurance company begins with (their
words) "Good news", and goes on to explain that a very old whole life
policy has reached the point where the total dividends received have
equaled all of the premiums paid.
The "good news" continues with the explanation that the above means
that $600+ of this year's $1100+ dividend will be taxable income.
(The tax can be deferred by purchasing additional paid up insurance,
which I choose to not do.)
The question is: Is this Line 21 Other Income? If not, where is it
entered on Form 1040?
Thank you.
Bill
It just occurred to my tired brain that, as it is a DIVIDEND, Schedule
B might be a another possibility. I suppose it would be too much to
expect that it would be a "qualified" dividend.
What say thee?
Wait or ask for a 1099? |
--
Best regards
Han
email address is invalid
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >> |
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Bill
Guest
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| Posted: Sun May 18, 2008 4:15 pm Post subject: Re: Taxable Life Insurance Dividends |
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wbrenner@nospamplease.net (William Brenner)
William Brenner wrote:
| Quote: |
OP elided, for brevity
It just occurred to my tired brain that, as it is a
DIVIDEND, Schedule B might be a another
possibility. I suppose it would be too much to
expect that it would be a "qualified" dividend.
What say thee?
|
I was just about to respond with that very same opinion, except I wasn't
sure of the "qualified" issue -- and would suggest you either contact
the company, or perhaps await the formal 1099-DIV, which will
undoubtedly be coming.
Bill
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >> |
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Elle
Guest
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| Posted: Sun May 18, 2008 7:39 pm Post subject: Re: Taxable Life Insurance Dividends |
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"William Brenner" <wbrenner@nospamplease.net> wrote
| Quote: |
a very old whole life policy has reached the point where
the total dividends received have equaled all of the
premiums paid.
snip
The question is: Is this Line 21 Other Income? If not,
where is it entered on Form 1040?
|
Pub. 17 (2007), page 64 and the 1040 instructions for Line
21 say Line 21.
--
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<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >> |
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Bill Brown
Guest
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| Posted: Mon May 19, 2008 4:19 am Post subject: Re: Taxable Life Insurance Dividends |
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On May 17, 9:12 pm, William Brenner <wbren...@nospamplease.net> wrote:
| Quote: |
A letter from a major life insurance company begins with (their words)
"Good news", and goes on to explain that a very old whole life policy
has reached the point where the total dividends received have equaled
all of the premiums paid.
The "good news" continues with the explanation that the above means that
$600+ of this year's $1100+ dividend will be taxable income. (The tax
can be deferred by purchasing additional paid up insurance, which I
choose to not do.)
The question is: Is this Line 21 Other Income? If not, where is it
entered on Form 1040?
|
Line 21. Despite what the insurance company calls the payment it is
not a dividend for federal tax purposes.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >> |
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Stuart Bronstein
Guest
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| Posted: Wed May 21, 2008 4:32 pm Post subject: Re: Taxable Life Insurance Dividends |
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Bill Brown <brownwp@longwood.edu> wrote:
| Quote: |
William Brenner <wbren...@nospamplease.net> wrote:
A letter from a major life insurance company begins with (their
words) "Good news", and goes on to explain that a very old whole
life policy has reached the point where the total dividends
received have equaled all of the premiums paid.
The "good news" continues with the explanation that the above
means that $600+ of this year's $1100+ dividend will be taxable
income. (The tax can be deferred by purchasing additional paid up
insurance, which I choose to not do.)
The question is: Is this Line 21 Other Income? If not, where is
it entered on Form 1040?
Line 21. Despite what the insurance company calls the payment it
is not a dividend for federal tax purposes.
|
Why isn't it considered a refund?
Stu
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >> |
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Seth
Guest
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| Posted: Wed May 21, 2008 6:45 pm Post subject: Re: Taxable Life Insurance Dividends |
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In article <Xns9AA5611DD5DF2avocatstuyahoofr@130.133.1.4>,
Stuart Bronstein <spamtrap@lexregia.com> wrote:
| Quote: |
Bill Brown <brownwp@longwood.edu> wrote:
William Brenner <wbren...@nospamplease.net> wrote:
A letter from a major life insurance company begins with (their
words) "Good news", and goes on to explain that a very old whole
life policy has reached the point where the total dividends
received have equaled all of the premiums paid.
Line 21. Despite what the insurance company calls the payment it
is not a dividend for federal tax purposes.
Why isn't it considered a refund?
|
Because it's in excess of the total paid.
If you buy something from a store for $20, with a $10 discount (so you
pay $10) and a $15 mail-in rebate, you have to report the $5 net you
receive as taxable income.
Seth
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >> |
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