Ms. James owns an insurance policy on her life. The policy has a cash surrender value (csv) and the insurance company allows its customers to borrow against the available (csv). To date, $20,000 in premiums have been pad and the policy has a cash surrender value of $55,000. To pay for an unexpected obligation, she had to borrow $55,000 from the insurance company. She is now considering cancelling the policy. She would like to know what obligations she has to the insurance company and what are the possible federal tax consequences of these events.

Summarize your findings in a research memo.

Instructions: 

Prepare a 1-2 page research paper directed at your clients fully explaining the results of your research/planning into their tax situation.

Answer rating: 100% (QA)

Your Name Your TitlePosition Date Research Memo Subject Insurance Policy Surrender and Loan Obligations Tax Consequences Dear Ms James I have conducted thorough research and analysis regarding your in... View the full answer