Life Settlement Capital Gains Tax Information
Life Settlement Sales may be Taxed as Capital Gains
Senior consumers who sell their life insurance policies in the secondary life insurance market known as life settlements may be able to treat a portion of the sale proceeds as capital gains rather than ordinary income, according to an IRS ruling.
A recent ruling follows a request by Senator Herbert Kohl, a Democrat from Wisconsin who is chairman of the Senate Special Committee on Aging. It allows the seller of a life insurance policy to treat the proceeds as capital gains minus the cost basis (Also known as premium outlay).
Paying capital gains taxes on the sale of an insurance policy may be more favorable for some retirees, and in many cases would be a lower amount than a tax at ordinary income levels.
More details can be found at Life Settlement Tax and Life Settlement News.
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