All Life Insurance Tips

I cashed in a whole life insurance policy last year and took a $10,000 loss, can I claim the loss?

The surrender charge was $10,000+/-, that is the loss I want to claim...

Public Comments

1. was the $10,000 the total amount that you paid in or is that the investment loss? If it's the investment loss then you should be able to deduct it, but I'd check with a tax professional.
2. My understanding is the loss (the negative difference between the sum of premiums paid {minus any withdrawals} and the surrender value of the contract) is deductable as a capital loss.
3. I don't know where $10,000 loss comes from. Does it come from the cost of insurance? For example, you gave the insurance company about $20,000. $5,000 is the cost of insurance. And, $5,000 is the surrender charges. Therefore, you only get $10,000 back. I don't think that you can deduct the cost of insurance and the surrender charges at all. Or, does it come from the investment of premium? For example, you gave the insurance company about $20,000. $5,000 is the cost of insurance, and $15,000 went to the investment. However, after stock market crash, the $15,000 investment only worse $5,000. Therefore, you said that you have a loss of $10,000. Since this account is tax-deferred account, you should find a CPA to understand whether the capital loss is tax deductible or not. I haven't found anyone who gives me a firm-yes yet.