Question

I’m the beneficiary of an insurance payout on the death of a relative — Is a life insurance payout taxable?

Answer

Regarding your question: Is life insurance payout taxable income, no, the IRS does not consider life insurance payouts taxable income.

However, life insurance payout taxable interest issues might arise if you earn interest on the payouts after the relative dies. If so, you’ll need to report this as taxable interest on your return.

Related Topics

Related Resources

The IRS, Bitcoin, and Other Virtual Currencies | H&R Block

Have you found yourself wondering how the IRS classifies Bitcoin? Our tax pros discuss relevant IRS Bitcoin law and notices. Learn more with H&R Block.

Taxes in the Gig Economy

The gig economy and taxes go hand-in-hand. If gig work is your primary form of income, review these important tax tips from our H&R Block tax professionals.

What Is Cryptocurrency? | H&R Block

What is Cryptocurrency? Bitcoin, Litecoin, and the like leave many wondering how to classify this new form of investment. Find the answer at H&R Block.

Direct Sellers and Taxes – How Does it Work?

Many are surprised to learn that even side gigs come with a tax price. H&R Block Tax pro's have arranged expert tips for those who owe direct sales taxes.