Submitted by ThrowawayWillRI t3_10b54p5 in RhodeIsland
Hello, I am a regular contributor to this subreddit but on my main account. I chose to use a throwaway so I don't get begged in DMs forever for money.
I had a relative pass away in Canada who left 1/3 of his life insurance pay out to myself (and my 2 siblings). It's not clear exactly how much everyone is getting yet, but it should be north of 15k each. His bank account had 15k in it already and we think his life insurance was 30k. No funeral, no burial. Just cremation in the cheapest urn.
The executor of the will is imploring us three siblings, who live in Ohio, California, and RI (myself) to figure out how much tax liability we each will have so if the total amount will be over the threshold, they can send it in two separate checks. I figured it would be just way easier to ask reddit than find the specific policy online myself.
TL;DR: Will I need to pay taxes on a life insurance pay out? If so, are there loopholes? Thank you!
pewpewacct t1_j487c5l wrote
It’s $15k not $15M, you’ll be fine either way