Tax Law History
Under the Internal Revenue Code ("IRC") dealing with life insurance benefits paid due to the death of the insured, the benefits are usually excluded from the taxable income of the beneficiary.
Because of the tax-free nature of death benefits, the IRC prohibits the deduction of the premiums paid for life insurance when the premium payor is also the beneficiary of the death benefit rather than the individual employee and their family. In addition, loans from insurers secured by policy values are not income and earnings credited to an owner's policy values (known as "inside buildup") by the insurance company are not currently taxed (and may escape taxation altogether if such earnings are not distributed other than as part of the death benefits paid upon the death of the insured).
Read more about this topic: Corporate-owned Life Insurance
Famous quotes containing the words tax, law and/or history:
“I find nothing healthful or exalting in the smooth conventions of society. I do not like the close air of saloons. I begin to suspect myself to be a prisoner, though treated with all this courtesy and luxury. I pay a destructive tax in my conformity.”
—Ralph Waldo Emerson (1803–1882)
“We’re the victims of a disease called social prejudice, my child. These dear ladies of the law and order league are scouring out the dregs of the town. C’mon be a glorified wreck like me.”
—Dudley Nichols (1895–1960)
“... that there is no other way,
That the history of creation proceeds according to
Stringent laws, and that things
Do get done in this way, but never the things
We set out to accomplish and wanted so desperately
To see come into being.”
—John Ashbery (b. 1927)