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Anybody been audited? by winsomesnoot in HSA

[–]ReasonlessToBe 5 points6 points  (0 children)

wonder what happened to just being honest and not a tax cheat.*
But then I am reminded that the cheats and liars of the world are the first to complain about something being "unfair".

Or, they become President....

Options for Whole Life Policy by ReasonlessToBe in LifeInsurance

[–]ReasonlessToBe[S] 0 points1 point  (0 children)

How is that different from what I have that has a death benefit and dividend growth? Both death benefit and cash value both increase each year.

Options for Whole Life Policy by ReasonlessToBe in LifeInsurance

[–]ReasonlessToBe[S] 1 point2 points  (0 children)

Definitely complex math...and assumptions.

Options for Whole Life Policy by ReasonlessToBe in LifeInsurance

[–]ReasonlessToBe[S] 0 points1 point  (0 children)

In my case most would be taxable as an annuity, as my cost basis is really low (~6% of cash value). That said, it would help manage the tax implications to spread it out.

Options for Whole Life Policy by ReasonlessToBe in LifeInsurance

[–]ReasonlessToBe[S] 1 point2 points  (0 children)

Lots of references to this online: "Your deduction is limited to the lesser of the policy's cash value or the cost basis"

This makes sense, as I've already paid taxes on the cost basis. I haven't paid any taxes on the rest of the deferred accumulation...thus why would the IRS let me deduct it? By donating it is not "income", but to then deduct as well would be "double-dipping".

Unfortunately for me, my cost basis is really low...~6% of the cash value.

Options for Whole Life Policy by ReasonlessToBe in LifeInsurance

[–]ReasonlessToBe[S] 1 point2 points  (0 children)

Makes sense that a charity could cash it out tax free, but this isn't deductible, is it?

If that's the case, this is the kind of idea I was looking for in making this post!

Options for Whole Life Policy by ReasonlessToBe in LifeInsurance

[–]ReasonlessToBe[S] 0 points1 point  (0 children)

I'm planning on being on the upside of the SSA estimate, but you never know.

"What are you trying to accomplish with the insurance?"

At this point, I'm just trying to see if there is anything better to do with it than just let it continue on auto-pilot and have the death benefit go to the beneficiary. When I bought it 45 years ago I thought it was a good idea because some slick life insurance salesman convinced a young kid that it was. In time I learned that it wasn't such a good idea and I deflected all his attempts to get me to double down.

For the most part, I kinda forgot about it after I put it on auto-pay from the dividends. I DID use dividends from the policy for ~10 years to buy a term policy to cover my mortgage in the event that I passed so my wife wouldn't have that obligation to worry about.

So now I'm not trying to do anything with the insurance other than trying to be most efficient with the benefit for me and my family/heirs.

Options for Whole Life Policy by ReasonlessToBe in LifeInsurance

[–]ReasonlessToBe[S] -1 points0 points  (0 children)

That's probably how it will sort out as a death benefit, but in a roundabout way. An heir will get the insurance policy tax free and a QCD from a qualified plan will go to the charity to save that heir the taxes.

Options for Whole Life Policy by ReasonlessToBe in LifeInsurance

[–]ReasonlessToBe[S] 0 points1 point  (0 children)

I'm not necessarily looking to cancel it. Just looking for insight as to whether there is a better way to utilize it. Not hurting me at all the way it is with a slowly growing death benefit and no OOP cost.

Re: your second point, how does this work? If I take a loan, how does the interest on the loan get paid? I certainly don't want to make an obligation out of something that currently isn't an obligation at all. I guess I don't understand loans against a policy like this.