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Secure Transaction Tax Treatment of Life Insurance Proceeds
Format
Self-Study
Course Level
Basic
CPE Credits
2 Credits: Taxes
Course Description
Understanding the tax implications of life insurance proceeds can be complex and challenging, posing a problem for professionals in tax, accounting, and finance. The intricate rules and exceptions in the Internal Revenue Code, such as §7702 and the modified endowment contract (MEC) rules, often agitate this complexity. This course offers a solution by providing a comprehensive guide to the tax treatment of both death and living proceeds from life insurance contracts. Paul Winn delves into critical topics like the statutory definition of life insurance, the taxation of policy loans and withdrawals, and the tax consequences of non-compliance. By the end of the course, participants will be well-equipped to navigate these complex tax scenarios, ensuring accurate and efficient handling of life insurance-related tax matters.
Learning Objectives
Upon successful completion of this course, participants will be able to:
Chapter 1
- Compare the customary income tax treatment given to life insurance policy death benefits with the income tax treatment given to such benefits under a life insurance policy transferred for a valuable consideration;
- Calculate the taxable portion of life insurance death benefits under a policy included in a qualified plan;
- Identify the tax treatment of death benefits received as periodic payments under a supplementary contract;
- Define the terms ‘terminally-ill’ and ‘chronically-ill’ as used in the Health Insurance Portability and Accountability Act; and
- Identify the income tax treatment of accelerated death benefits and viatical settlements.
Chapter 2
- 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.
Course Specifics
SS8152539
February 8, 2024
There are no prerequisites.
None
61
Compliance Information
IRS Provider Number: 0MYXB
IRS Course Number: 0MYXB-T-02446-24-S
IRS Federal Tax Law Credits: 2
CTEC Course Number: 2071-CE-0908
CTEC Federal Tax Law Credits: 2
CFP Notice: Not all courses that qualify for CFP® credit are registered by Western CPE. If a course does not have a CFP registration number in the compliance section, the continuing education will need to be individually reported with the CFP Board. For more information on the reporting process, required documentation, processing fee, etc., contact the CFP Board. CFP Professionals must take each course in it’s entirety, the CFP Board DOES NOT accept partial credits for courses.
CTEC Notice: California Tax Education Council DOES NOT allow partial credit, course must be taken in entirety. Western CPE has been approved by the California Tax Education Council to offer continuing education courses that count as credit towards the annual “continuing education” requirement imposed by the State of California for CTEC Registered Tax Preparers. A listing of additional requirements to register as a tax preparer may be obtained by contacting CTEC at P.O. Box 2890, Sacramento, CA, 95812-2890, by phone toll-free at (877) 850-2832, or on the Internet at www.ctec.org.
Meet The Experts
Paul J. Winn CLU ChFC is a writer with more than 30 years experience in the life insurance and securities industry as an agent/registered representative, an agency head, a marketing vice president for a life insurance company and the president of a corporate registered investment adviser. He was a long serving member of the advisory board to the New York State insurance department. He is a published book author and creator of more than 200 taxation, insurance and securities training courses.
QAS Self-Study
