Description: The interaction of section 7702 cash value accumulation test [CVAT] and state nonforfeiture laws [SNFL] create a dual limitation on traditional life insurance contratcs. CVAT limiting the maximum permissible cash value and SNFL requiring a minimum cash surrender value. This article examines these dual limitations.

Description: The proposed regulations define a class of products known as “qualifying longevity annuity contracts” (QLACs), which are excluded from the account balance used to determine required minimum distributions. By exempting longevity annuities (up to a specified limit) from the RMD rules, it is hoped that it will provide individuals under defined-contribution plans the option to use an “affordable” portion of their account balance to purchase a longevity annuity. The proposed regulations apply to tax-qualified defined-contribution plans under section 401(a), section 403(b), individual retirement annuities and accounts (IRAs) under section 408, and eligible governmental section 457 plans.

Description: A brief rundown of the articles contained in the October 2012 issue of Taxing Times.

Description: A discussion of the theoretical basis of deferred income tax accounting (accounting for actuaries), an overview of the current statutory accounting rules governing income tax accounting under SSAP 101, and some examples of the effects of SSAP 101’s admissibility test on regulatory capital.

Description: When a life insurance company changes its basis for computing tax reserves, a special 10-year spread rule found in section 807(f) of the Internal Revenue Code applies to the change. But, what happens if the statutory accounting for original issue discount (OID) or bond premium changes? A discussion follows.

Description: The article deals with the critique of a technical advice memorandum issued by the IRS. It basically states the author's opinion that, although the conclusion was correct, the reasoning given was inappropriate.

Description: A discussion of risk and tax risk.

Description: The article discusses two IRS private letter rulings addressing the application of the section 72(s) after death distribution requirements to joint-life GLWBs covering non-spouses. The article explores the legal basis for the IRS conclusion and the potential utility of the distribution method approved by the ruling.

Description: The article discussing the differing tax definitions of life insurance in the US and Canada and relates them to new international tax reporting regimes such as FATCA.

Description: The article discusses a recent IRS private letter ruling granting IRC section 72(b) exclusion ratio treatment for amounts received from an innovative payout option.under a deferred variable annuity.