Tax Treatment of Life Insurance Proceeds - 2018
Field of Study:
Tax Treatment of Life Insurance Proceeds is an online course that discusses the income tax treatment
of death benefits and living proceeds from life insurance contracts. It considers the statutory definition of life insurance
contained in Internal Revenue Code §7702 and the tax consequences of a life insurance contract’s failure to meet the definition.
It addresses the general rules governing the taxation of life insurance policy death benefit proceeds and examines the consequences
of: a transfer for value; inclusion of a policy in a qualified plan; corporate-owned life insurance; and the payment of death
benefits under a settlement option. The course also discusses the tax treatment of proceeds received under viatical settlements
and accelerated death benefits.
The course also examines the federal tax rules concerning taxation of life insurance policy living proceeds. In so doing, it
considers: the modified endowment contract (MEC) rules and the tax consequences of a life insurance policy’s MEC status; the tax
treatment of policy loans, withdrawals and surrenders; and the tax treatment of proceeds received under life settlements. A final
examination covering the course material is administered.
After completing this course you will be able to:
- Calculate the gain to be recognized as a result of various life insurance policy transactions, including –
- surrenders, and
- payment of death benefits;
- Identify the changes to the customary tax treatment of life insurance policy living proceeds resulting from the policy being deemed a modified endowment contract (MEC);
- Calculate the reportable gain upon receipt of life insurance policy death benefits when the life insurance policy –
- has been transferred for a valuable consideration, or
- was included in a qualified plan;
- Recognize the types of life insurance exchanges that are tax-free under IRC §1035;
- Define the terms “terminally-ill” and “chronically-ill” as used in the Health Insurance Portability and Accountability Act;
- Identify the income tax treatment of accelerated death benefits, viatical settlements and life settlements;
- Recognize the customary income tax treatment given to life insurance policy withdrawals, loans and surrender proceeds;
- Identify the changes to the tax treatment of life insurance policy living proceeds resulting from the policy being deemed a modified endowment contract;
- Identify the types of life insurance exchanges that are tax-free under IRC §1035; and
- Recognize the income tax treatment of life settlements.
General understanding of federal income taxation.
Type of Delivery Method:
Recommended CPE Credits:
Final examination expiration date:
The program participant will have one year from the date of purchase to complete the course and the final examination.
Web CPE is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have the final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org