Anyone Know the Tax Consequences of Acc. Benefit Rider?

[sdmink]

I would ask my CPA, but she'd send me a $95 bill... On appications, it says to consult a tax professional about how utilizing the Accelerated Benefit Rider might cause you to owe taxes.

Does anyone know this effect? Does it vary by state?

 

[Voyager]

You are taxed as ordinary income.

 

[somarco]

Don't guess. If you don't know the correct answer keep your fingers in your pocket.

The income from a living benefit is not subject to federal income tax, provided it meets certain criteria. In most states, the living benefit is not subject to state income tax. To qualify for a tax-free exemption on the benefit, the policyholder must be classified as "terminally ill" when he files his income taxes. A tax advisor can tell you if you qualify.

 

[sdmink]

Don't guess. If you don't know the correct answer keep your fingers in your pocket.

Thanks. I knew there was another good agent or two in Atlanta, haha.

 

[STIBROKER]

{Thread approved by STIBROKER}