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Tax Consequences Of A Sale Of A Life Insurance Policy As A Viatical Settlement

What Are The Tax Consequences Of A Viatical Settlement On The State Level?

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Unlike federal tax law which is the same for residents of all states, state tax law differs from state to state. Each state determines the taxability of a viatical settlement with respect to its residents as shown in the chart below.

STATE	Exempts Proceeds From Viatical Settlement From State Tax	No State Income Tax	Applies Federal Tax Standard	Possibly Taxable
ALABAMA (AL)			√
ALASKA (AK)		√
ARIZONA (AZ)				√
ARKANSAS (AR)				√
CALIFORNIA (CA)	√
COLORADO (C0)			√
CONNECTICUT (CT)			√
DELAWARE (DE)			√
DISTRICT OF COLUMBIA (DC)				√
FLORIDA (FL)		√
GEORGIA (GA)				√
HAWAII (HI)				√
IDAHO (ID)				√
ILLINOIS (IL)			√
INDIANA (IN)				√
IOWA (IA)				√
KANSAS (KS)				√
KENTUCKY (KY)				√
LOUISIANA (LA)			√
MAINE (ME)	√
MARYLAND (MD)			√
MASSACHUSETTS (MA)				√
MICHIGAN (MI)			√
MINNESOTA (MN)			√
MISSISSIPPI (MS)				√
MISSOURI (MO)			√
MONTANA (MT)			√
NEBRASKA (NE)			√
NEVADA (NV)		√
NEW HAMPSHIRE (NH)				√
NEW JERSEY (NJ)				√
NEW MEXICO (NM)			√
NEW YORK (NY)	√
NORTH CAROLINA (NC)				√
NORTH DAKOTA (ND)			√
OHIO (OH)			√
OKLAHOMA (OK)			√
OREGON (OR)				√
PENNSYLVANIA (PA)				√
PUERTO RICO (PR)				√
RHODE ISLAND (RI)			√
SOUTH CAROLINA (SC)				√
SOUTH DAKOTA (SD)		√
TENNESSEE (TN)				√
TEXAS (TX)		√
UTAH (UT)			√
VERMONT (VT)			√
VIRGINIA (VA)			√
WASHINGTON (WA)		√
WEST VIRGINIA (WV)				√
WISCONSIN (WI)				√
WYOMING (WY)	√