A New Recipe for Life Insurance Valuation

Katt, Peter C.
March 2007
Journal of Financial Planning;Mar2007, Vol. 20 Issue 3, p36
Academic Journal
The article discusses methods for financial planners to value life insurance policies that are distributed from qualified retirement plans. Regulations issued by the United States Treasury in August 2005 under Internal Revenue Code Section 402(a) provide taxpayers with safe-harbor values for life insurance policies. The changes to the regulations have prevented tax professionals from avoiding taxes through abusive qualified retirement plans. The author analyzes the regulation and its effect on financial planning.


Related Articles

  • Protecting Clients from Life Insurance Schemes. Katt, Peter C. // Journal of Financial Planning;Nov2002, Vol. 15 Issue 11, p38 

    This article offers advice on how financial planners can protect their clients from life insurance schemes. The inherent complexities of permanent life insurances make it a favorite asset for what some financial planners think of as cutting-edge tax planning. Developers, promoters and sellers...

  • From 64-328 Through 2007-34: Split-Dollar Comes Full Circle. Repya, Debra // National Underwriter / Life & Health Financial Services;11/12/2007, Vol. 111 Issue 42, p14 

    The article reports on the changes in the regulations concerning split-dollar life insurance arrangements issued by the U.S. Internal Revenue Service (IRS). These arrangements are used to assist an individual in the purchase of life insurance. It was changed over time into an executive benefit...

  • Private Split-Dollar Rulings: A New Form of Split-Dollar or Just an Extension of the Existing Rules. Brody, Lawrence; Althauser, Lucinda // Journal of Financial Planning;Feb1998, Vol. 11 Issue 1, p38 

    This article discusses issues on the tax consequences relating to "private" split-dollar agreement between the insured's spouse and a trust created by the insured. Under the terms of the agreement, the trust, which owned the policy, contributed the "economic benefit" cost of the agreement toward...

  • AVALANCHE! Adney, John T. // Journal of Financial Service Professionals;Mar2004, Vol. 58 Issue 2, p17 

    The article explains the items under the investor control doctrine, including an amendment proposed to the variable account diversification regulations, issued by the U.S. Internal Revenue Service. It treats the owner of a variable annuity of life insurance contract who effectively controls the...

  • THE STRANGE CASE OF THE VALUATION REGULATIONS. Commito, Thomas F. // Journal of Financial Service Professionals;Jul2004, Vol. 58 Issue 4, p32 

    On February 13, 2004, the U.S. Department of the Treasury and the Internal Revenue Service (IRS) issued their pronouncements on the valuation of life insurance policies where the insured people are still alive. These pronouncements consisted of a proposed regulation designed to replace several...

  • IRAs: New Minimum Distributions Rules Allow Planning Opportunities. Shanney-Saborsky, Regina // Journal of Financial Planning;Jun98, Vol. 11 Issue 3, p28 

    This article discusses new proposed regulations issued by the U.S. Internal Revenue Service (IRS), in the form of amendments and clarifications to the existing proposed regulations under Section 401(a)(9) of the Internal Revenue Code, as of June 1998. The new proposed regulations clearly...

  • The Latest Word on Split-Dollar. Brody, Lawrence; Althauser, Lucinda // Journal of Financial Planning;Feb2001, Vol. 14 Issue 2, p40 

    Discusses the Field Service Advice 200040001 issued by the United States Internal Revenue Service, which deals with an unusual use of split-dollar. Purpose of the split-dollar agreements in the example; Steps of the transaction; Analysis on the tax effects of the split-dollar agreement;...

  • Treasury Issues Final Nonqualified Deferred Compensation Guidance: Part 2. Schneider, Paul J. // Journal of Financial Service Professionals;Nov2007, Vol. 61 Issue 6, p45 

    The addition of Section 409A to the Internal Revenue Code by the American Jobs Creation Act of 2004 has opened a complex new world for nonqualified deferred-compensation (NQDC) plans. The provisions of Section 409A require that significant changes must be made to almost all existing...

  • IRS Allows Loss on Surrender of a Life Insurance Contract. Commito, Thomas F. // Journal of Financial Service Professionals;Mar2010, Vol. 64 Issue 2, p14 

    Private Letter Ruling 200945032 allows a loss deduction for a life insurance policy. Unfortunately, the IRS continues to assert that in certain situations, basis in a life policy must be reduced by COI charges. This is already an element of contention, and it will remain to be seen how this...


Read the Article


Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics