Constructive Receipt

Updated: 29 February 2024

What Does Constructive Receipt Mean?

A constructive receipt is a receipt that lists a person’s entire income for a given tax period. Income from life insurance policies can be included in constructive receipts.

Insuranceopedia Explains Constructive Receipt

The government uses constructive receipts to help calculate a person’s income and figure out how much income tax they owe.

The returns of investment vehicles from life insurance policies, such as annuities, can be taxed. Death benefits, however, are not usually considered taxable income. They can, therefore, often be kept off constructive receipts.

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