advertisement
May 1, 2005 12:00 PM
THE FMV OF LIFE INSURANCE CONTRACTS
The Internal Revenue Service issued Revenue Procedure 2005-25 on April 8, providing additional guidance on determining the fair market value (FMV) of a life insurance contract distributed by a qualified plan or an employer. We have this report from Richard L. Harris, president of BPN Montaigne LLC in Clifton, N.J. and Charles L. Ratner, national director of Personal Insurance Counseling at Ernst & Young in Cleveland:
The new revenue procedure only slightly liberalizes the rules for valuing an insurance contract distributed from qualified plans. Taxpayers can reduce the value of the contracts by some amount of the surrender charge. But the new regs cap the amount of the allowable surrender charge at 30 percent, and that's based upon a complicated formula averaging out the future 10 years charges and projected cash values. So this new guidance by no means breathes new life into such strategies as “pension rescue” plans, which use artificially depressed values of a life insurance policy to take assets out of a taxable account on a favorable basis.
Sign in to
view the full article
Not a subscriber?
Subscribe & Save
Get immediate access to Trust & Estates onlineSubscriber Benefits
Learn more about Trust & Estates magazine, online article access and our free enewsletters.
Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
E-Newsletter Signup
Poll
Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
E-Newsletter Signup
advertisement
T&E eNewsletters
Wealth Watch 
Wealth Watch is a free e-newsletter delivered twice a month with expert advice on wealth management from Trusts & Estates.
Latest from Wealth Watch
Tech. Review
Technology Review is a free monthly e-newsletter from Trusts & Estates and nationally renowned expert Donald H. Kelley. It is geared to keeping estate planning lawyers current on the latest tech news they can use.
Latest from Tech. Review
Philanthropy Tax Guide
Each month, Conrad Teitell reports on and analyzes as important tax development governing charitable contributions, including how to maximize the benefits and avoid the pitfalls.
Latest from Conrad Teitell
2011 Trust Glossary
Click here to download the 2011 Trust Glossary
50 Years Ago This Month
| 50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb. |
Conrad Teitell's Guide to Tax Benefits For Charitable Gifts
Click here to view the most up to date guide (September 2011)
Press Releases
advertisement
advertisement
