If it is not estate tax uncertainty, it's threats to inside buildup
I started to defend the inside buildup
but was interrupted.
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).
Congress could look to other life insurance products to offset the lost tax revenues caused by the excise tax and may consider a repeal of the inside buildup
tax deferral for life insurance and annuities.
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.
The owner would be taxed on the inside buildup
in the policy beyond his cost basis.
The repeal of the 20 percent special life insurers' deduction, limitations of loss reserves to the present value of unpaid losses, reduction n the deductibility of unearned premiums, taxation of a portion of certain dividends (those subject to the intercorporate exclusion) and previously tax-exempt securities, and the potential tax on inside buildup
, were aimed directly at the operations of insurers.
The report questions whether this favorable treatment on inside buildup
is the most effective way of achieving these goals.
The Congressional Joint Committee on Taxation (JCT) has, for many years, classified the exclusion of the inside buildup
as a major tax expenditure.
First, it notes that in situation 2 there was no inside buildup
of cash value because this was a term policy, so the "substitute for ordinary income" doctrine does not apply.
He also said NWNL is well positioned to address industry issues such as taxation of the inside buildup
of annuity products, healthcare reform and market conduct.
If the inside buildup
no longer accrued tax-free and death benefits became subject to federal income tax?