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Insurance cash values may provide tax-free income as long as the policy is kept in force and withdrawals do not exceed the cost basis; A section 79 plan may be used for the following applications Group life insurance benefits; Deductible insurance to fund estate planning needs of the business owner
Some life insurance policies also offer the opportunity to accumulate cash value through an investment component. … Continue reading → The post IRS Section 7702: Life Insurance Tax Definition ...
A 1035 exchange is a like-kind exchange that allows a tax-free exchange of a life insurance policy, annuity contract, long-term care product or endowment for another of a similar structure.
However, the deferred compensation will be still subject to the hospital insurance portion of the FICA tax (referred to as the "HI" portion, or "Medicare tax") because the hospital insurance wage base is currently unlimited. The employee portion of the Medicare tax is 1.45% of wages (and an extra 0.9% for high-earners).
In those jurisdictions where life insurance proceeds are only tax-free at death, tax liabilities that come due at death are often offset by a policy of the same size. Since the mathematics required to compare different strategies is quite complex, most consumers defer to an accountant or life insurance agent for advice.
For example, if your tax return is due April 15, but that date falls on a Saturday, then your tax return due date is forwarded to the first business day following April 15, or Monday, April 17. However, if a deadline falls on a Sunday, the requirements for the exchange must be met no later than the last business day prior to the deadline date ...
Private-placement life insurance is a little-known tax-avoidance tactic. When structured correctly, PPLI policies can be used to pass on assets from stocks to yachts to heirs without incurring an ...
Universal life insurance (often shortened to UL) is a type of cash value [1] life insurance, sold primarily in the United States.Under the terms of the policy, the excess of premium payments above the current cost of insurance is credited to the cash value of the policy, which is credited each month with interest.