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Bill
Bill, Enrolled Agent
Category: Tax
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Experience:  EA, CEBS - 35 years experience providing financial advice
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My 11 year old daughter was beneficiary on my Mothers ...

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My 11 year old daughter was beneficiary on my Mother's 5,000 life insurance. My mother passed away in march 2007 and my daughter was sent a check for the 5000 dollars. My wife and I are claiming our daughter on our taxes but does our 11 year old still have to pay taxes on this type of finanical disbursement?

No, life insurance proceeds are tax-free and do not have to be reported.

http://www.irs.gov/faqs/faq4-9.html

 

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