Life Settlement Tax Impact Analyzer
The tax impact analyzer gives an advisor a general estimate of how life settlement proceeds may be divided into a tax-free return of basis, ordinary income, and capital gain, following the framework described in IRS Revenue Ruling 2009-13 (as modified by Revenue Ruling 2020-5).
Who it's for
CPAs, financial advisors, and tax-aware planners preparing to discuss a potential life settlement with a client.
Inputs it uses
- Illustrative settlement amount
- Total premiums paid (cost basis)
- Cash surrender value
- Client's assumed tax brackets
What you get
An estimated breakdown of the proceeds by tax category and an approximate after-tax amount. This is an educational estimate only; the client's actual tax treatment depends on their circumstances and should be confirmed with a qualified tax professional.
This tool is available to financial professionals with an access code. Outputs are illustrative estimates, not offers or appraisals. See all advisor tools.
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