[famh110]

NINJA Question –

Hello…I going through the individual taxation portion of the Reg notes and have one question related to it. There is a heading for Tax-free Dividend Income and it includes the following:
Some stocks, S-Corp, and Life Insurance (it’s on page 29).
How is it that Life Insurance is being regarded as Dividend Income. Please explain!!

Thanks so much!!

[krstnam]

Some whole life plans have dividends. I don't think it has to be whole life but those are the plans that sometimes have that feature.

[famh110]

@krstnam…thanks for explaining that!! i never knew that life insurance paid back dividends…i guess the word dividend threw me off.
found a helpful link on this topic if anyone else is interested: https://www.dfs.ny.gov/consumer/que_top10/pr_que_life_who.htm

[krstnam]

Anytime. I only knew this because when I was in college, a guy I was dating was paying for a whole life plan and got dividends and I had no idea that life insurances offered payments before you died. 🙂

[famh110]

wow! you have a pretty interesting story there. this reminds me of a saying that goes like: the past is where you learned the lesson. the future is where you apply the lesson. (unknown) 🙂

[famh110]

between, can you share your experience for studying for regulation and how you managed to pass? thanks

[Author]

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