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Tax Treatment of Life Insurance Proceeds

  • ITEM SKU
    8635
  • CPE Hours
    2
  • Full Course Price
    $24.50
Exam Questions: 10
Course Level: Basic
Pages: 80 | Content: 72, Supplemental: 8
NASBA Area of Study: Taxes
Not Acceptable for: N/A
Version: 8635

This course examines the federal tax treatment of life insurance proceeds from the perspective of an individual policy owner, insured, and beneficiary, with emphasis on personal and family wealth transfer planning: beneficiary designations, policy ownership, irrevocable life insurance trusts, gift-tax consequences of premium payments, and estate-tax inclusion rules. All course material provided. No prerequisites. Course level: Course level: Basic.

EA Program Approval Number: ZX34G-T-00725-26-S

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Course Information

Table of Contents
  • Life Insurance and the Federal Income Tax Exclusion
  • Exceptions to the Exclusion and Accelerated Benefits
  • Contract Design and the Taxation of Lifetime Distributions
  • Estate Tax Treatment of Life Insurance
  • Irrevocable Trusts, Gift Tax Planning, and the Exemption Environment
  • Specialized Personal Planning Applications
  • Business and Retirement Plan Uses
Objectives
  • To recall the statutory definition of life insurance in IRC §7702
  • To recognize the general transfer-for-value rule of IRC §101(a)(2)
  • To identify when a life insurance contract becomes a modified endowment contract (MEC)
  • To recall the requirements of IRC §2042
  • To recognize why many ILITs grant beneficiaries a Crummey withdrawal power over trust contributions
  • To recall the characteristics of an absolute assignment of an existing policy to charity
  • To recall why Treasury Regulations impose “incidental benefit” limits

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