Description: T3: TAXING TIMES TIDBITS

Description: In September 2009, the Internal Revenue Service IRS released a private letter ruling PLR 200939018 June 18, 2009 addressing a contract in which the right to receive annuity payments and otherwise access a contract’s cash value is contingent upon the annuitant living to a specified age. The ruling holds that the contract is an annuity contract for purposes of section 72 of the Code. This article reviews the specifics of the ruling.

Description: COLI products continue to be the focus of litigation by the IRS over the deductibility of policy loan interest. This COLI Update consists of two articles concerning COLI cases and their most recent court decisions. The first concerns a District Court’s ruling on insurable interest, and the second provides an analysis of the Sixth Circuit reversal of a trial court decision in a case involving economic substance.

Description: Legislation imposing new restrictions on a wide range of compensation arrangements was signed into law on October 22, 2004. The American Jobs Creation ActAJCA adds a new section 409A to the Internal Revenue Code, which imposes restrictions on funding, distributions, and elections to participate in nonqualified deferred compensation plans.

Description: This letter discusses answers to the question “Is Homogeneity Required to Qualify as Insurance?”

Description: One of the significant tax benefits of a life insurance contract is that, for purposes of determining the taxable amount of proceeds received under the contract on distributions or surrender,the investment in the contract includes the aggregate amount of premiums, unreduced by the cost of insurance provided IRC section 72c. IRS rules net surrender value reserves must be reduced by a YRT reserve credit.

Description: Overview of articles in the October 2013 issue of TAXING TIMES.

Description: On Aug. 11, 2011, the Internal Revenue Service IRS released Notice 2011-68,1 regarding the tax treatment of stand-alone and “combination” longtermcare LTC insurance products. The Notice provides interim guidance on certain issues and requests public comment on others. This article discusses that notice and taxation issues related to Long Term Care products, combination products and long term care riders to annuities.

Description: This article begins with an overview of how the tax treatment of partial exchanges has evolved over the last decade or so, including the concerns that led the Service to resist giving taxpayers carte blanche on such transactions.The new guidance shortens from 12 to six months the window following a partial exchange in which the transaction could be called into question, and simplifies the regime by de-linking it from the exceptions to the section 72q penalty tax.4 Finally, the guidance provides coordination with recent partial annuitization legislation and answers to other open issues. This article then summarizes Rev. Proc. 2011-38 and elaborates on why the features outlined above are important and helpful improvements over prior guidance.

Description: An interview with William J. Wilkins, Chief Counsel for the Internal Revenue Service and the Assistant General Counsel in the Department of the Treasury.