How is NJ and Federal Estate and Income Tax handled for annuities and life insurance?
by admin ~ March 28th, 2007 . Filed under: United States .
Elisabeth F asked:
Serving as executor - both parents passed in 2005. How is the Estate and Income Tax handled for both New Jersey and Federal returns on Annuities and Life/Term Insurance. Not sure what is taxable as Income and what is taxable to Estate. Also, not sure who pays the taxes, beneficiary or estate on the income tax - assuming there is a income tax liability.
Henry Charlesworth
Serving as executor - both parents passed in 2005. How is the Estate and Income Tax handled for both New Jersey and Federal returns on Annuities and Life/Term Insurance. Not sure what is taxable as Income and what is taxable to Estate. Also, not sure who pays the taxes, beneficiary or estate on the income tax - assuming there is a income tax liability.
Henry Charlesworth
March 30th, 2007 at 1:42 pm
Annuities are taxable.
Life insurance is not.
Each recipient will be responsible for any tax obligation as the amount will be added to the respective income for the current year paid.