Joey, age 40, is the president of Alpha Enterprises. Joey is insured under a group life...
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Joey, age 40, is the president of Alpha Enterprises. Joey is insured under a group life permanent policy that provides him with retirement income at the earlier of age 65 or after 30 years of service. To receive this benefit, however, he must be an employee of the company at his retirement date. All premiums on the policy are paid by Alpha Enterprises. Is the cost of the permanent coverage for Joey taxable, and why or why not? A) No, because Joey does not pay premiums on the policy B) Yes, because Joey is provided with retirement income C) Yes, because Joey is an officer of the corporation D) No, because Joey is not substantially vested in the policy Joey, age 40, is the president of Alpha Enterprises. Joey is insured under a group life permanent policy that provides him with retirement income at the earlier of age 65 or after 30 years of service. To receive this benefit, however, he must be an employee of the company at his retirement date. All premiums on the policy are paid by Alpha Enterprises. Is the cost of the permanent coverage for Joey taxable, and why or why not? A) No, because Joey does not pay premiums on the policy B) Yes, because Joey is provided with retirement income C) Yes, because Joey is an officer of the corporation D) No, because Joey is not substantially vested in the policy
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The correct answer is D No because Joey is not substantially vested in the policy Heres why Premium ... View the full answer
Related Book For
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
Posted Date:
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