Subject: Re: Re: Re: Re: Re: Re: Re: Cash Surrender

Comments:
: : : : : Lillie, I am sure that you already know this, even Ken admitted that dividends reduce your cost basis. : If , as Ken Young said, that the dividend is a return of an over-charge in premium,correct, than you would take the gross premium minus the dividend, (remember, the company is refunding you back the over-charge as a dividend) so that gives you your net premium (cost basis). : Now you cash the policy in. Your taxable gain will be the cash surrender value minus your cost basis ( gross prem. minus div.) Interest on the dividends does not come into play as it was reportable taxable income ever year. In other words, you have already paid tax on the interest. : Ken, are you sure you are not mixing this up with your explainaton of the Roth IRS??? : : : : : : Only whole life policies have non-forfeiture values. Also, a whole life doesn't show how much the dividends are. : : : : Call the company! : : : : : : : Some term also have cash surrender value; however most don't. : : : The dividend value is always disclosed separately, if the cash surrendaer value exceeds the cost of the insurance you will pay taxes on the difference. : : ---------------------------->>> Lillie....Once again so you can understand, if in fact you owned a participating cash value policy and you had been reporting your interest earned each year to the IRS and paid taxes on that interest earnings, when you cash surrender your policy the only item you report is your guaranteed cash values verses the premiums you paid for the policy. : : You see, the insurance dividend is not taxable handled in a manner as it never was received by you for tax purposes. You have already have paid taxes on your interest earnings of the dividend accumulation account if there was any if you have not been spending the dividend each year that was sent to you by the company. : : I invite you to take this message I have posted to a CPA. : : I have put in a call to a CPA. If he is not there, I will have the person I speak with explain the scenario and ask the person to have him telephone me. I will ask him for a written verification so we can once again send the ignoramus Jax away from this board also with more egg on his face. : : I will trade off the name of the CPA for information I am seeking from Jax/Steve he has refused to provide me with. : : I will get back to you ASAP. : : xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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