Critical Illness Test

[0b1kanobee]

??? If your post was meant for me.. I am saying it is taxable....

I'm on the fence because I see nothing definitive except consulting with a tax adviser.

I was told once by three different tax specialist that the proceeds from taxable gains were taxable until I found out through my own research that if you had three qualifying events all happen to you, you no longer owe the tax (this was from the sale of a house).

I'll have to do some more digging before I come to any conclusions and even then the IRS doesn't even know their own laws.

A few articles I have read on the issue claim the IRS is still trying to figure it out.

 

[somarco]

Terminally or chronically ill defined. A terminally ill person is one who has been certified by a physician as having an illness or physical condition that reasonably can be expected to result in death within 24 months from the date of the certification. A chronically ill person is one who is not terminally ill but has been certified (within the previous 12 months) by a licensed health care practitioner as meeting either of the following conditions.

If the CI policy is actually paying an accelerated death benefit, such as under a CBL plan, the benefit may be a taxable event.

 

[rousemark]

I'm on the fence because I see nothing definitive except consulting with a tax adviser.

I was told once by three different tax specialist that the proceeds from taxable gains were taxable until I found out through my own research that if you had three qualifying events all happen to you, you no longer owe the tax (this was from the sale of a house).

I'll have to do some more digging before I come to any conclusions and even then the IRS doesn't even know their own laws.

A few articles I have read on the issue claim the IRS is still trying to figure it out.

Doesn't surprise me.. and maybe I should qualify what I am saying by stating that "according to my understanding" which may or may not be wrong..... I certainly am not a tax expert.

 

[rousemark]

If the CI policy is actually paying an accelerated death benefit, such as under a CBL plan, the benefit may be a taxable event.

I agree.. The CBL plan is not a CI policy.. It is a group life policy with a CI "benefit".. In other words it is a life policy and life rules will apply.

Critical Illness - Dearborn National

 

[billberry12]

"life rules will apply"

and that means ????????????/

 

[0b1kanobee]

I certainly am not a tax expert.

When you find one let me know LOL

Actually I found one out in California BUT even he didn't admit to not knowing what I had found for my situation. He just told me to send him what I had found. Why would he want what I found if he already knew?

Anyway, the local tax adviser I deal with for simple stuff was blown away by what happened in my situation once I showed him my supporting documentation and the laws along with the outcome of my case.

 

[rousemark]

"life rules will apply"

and that means ????????????/

See post #7 ..........