Question
My father in law passed away in Sept. My mother in law received life insurance from the VA. Does she have to pay taxes on the money she received?
I am hearing different stories from other family members. I am in Ca. if that helps.
Thanks for any information you can give.
Answer
If your question is whether or not VA life insurance is different than most policies- I'm not sure. Life insurance policies are not subject to income tax... they are however (if the estate is valued over 1 million) subject to estate taxes for non-spousal beneficiaries. As long as your mother-in-law and father-in-law were legally married at the time of death she shouldn't be taxed.