Final answer:
The portion of a partial withdrawal from a universal life policy that will be taxed depends on the specific circumstances and amounts involved.
Step-by-step explanation:
The portion of a partial withdrawal from a universal life policy that will be taxed depends on the specific circumstances and amounts involved. However, generally speaking, the interest portion of the withdrawal is taxed, while the remaining portions may not be taxed, or may be subject to different tax treatment.
The cash value represents the accumulated savings in the policy and is usually not taxed when withdrawn. The principal is the money that was originally paid into the policy and is typically not subject to taxation upon withdrawal either. In some cases, a portion of a withdrawal may be treated as a loan repayment, in which case it may not be subject to immediate taxation, but may still have tax implications in the future.
It's important to note that tax rules and regulations can vary depending on the jurisdiction and individual circumstances, so it's always best to consult with a qualified tax professional or financial advisor for specific advice regarding the taxation of partial withdrawals from a universal life policy.