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inside buildup

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inside buildup
The cash value increases in a life insurance policy. Inside buildup is free of income taxation during the period of buildup, thus making cash-value insurance a more desirable investment vehicle for people in high income-tax brackets.


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The inside buildup under A's life insurance contract immediately prior to the sale to B was $14,000 ($78,000 cash surrender value less $64,000 aggregate premiums paid).
Thus, a taxpayer should expect capital gain treatment on the sale of a life insurance contract, except for the requirement that any inside buildup in the contract be treated as ordinary income.
4) In 1959, the Supreme Court provided some resolution of the securities law questions, and shortly thereafter Congress signaled its decision to allow the inside buildup of variable annuities to accumulate on a tax-deferred basis.
 
 
 
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