Life Insurance Beneficiary Indiana

USA Discussion in 'Individuals' started by drmax, Sep 29, 2018.

  1. drmax

    drmax

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    I will be entitled to an amount of funds shortly, life insurance. I understand these funds will not be taxed. Unsure how to ask this properly so here it goes....
    With whatever amount this life insurance is, how is the amount kept separate as to not be considered taxable by IRS?
    Do I need to keep it separate from say, my checking or savings account, or other account?
    I have a credit union where I intend to place these funds, that already has a balance of say 11k within, which is making .5% and is liquid. So if I were to place the money in on this account, how does the IRS keep this separate as so I do not get taxed on it? (say I add 100K which then makes the total 111K....confused as to how the IRS knows to keep life insurance separate from regular funds)

    Sorry if I'm not wording this correctly, but hopefully you understand my question.
    Drmax....Indiana
     
    drmax, Sep 29, 2018
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  2. drmax

    bklynboy VIP Member

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    You do not need to keep it separate. Where the funds are placed has no bearing as to how it is tax free. Given this question I strongly recommend you hire a tax preparer when you file your taxes at the end of the year
     
    bklynboy, Sep 30, 2018
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  3. drmax

    drmax

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    Oh yes, I must use a preparer due to this issue and the entire death of spouse issue. But thank you for saying what you did. That was a BIG question in my mind and I feel safe now. Thank you!! Drmax
     
    drmax, Sep 30, 2018
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