Tag Archive for Life Insurance

FATCA Inquisition For Canadians Applying For Life Insurance

John Richardson

Sad but true. It’s quite understandable that from a “U.S. Worldview” that a life insurance policy is nothing but a “sacred instrument of tax deferral” (and therefore of tax evasion). U.S. citizens are the most highly regulated people in the world. As such it is no surprise that the possible purchase of life insurance could trigger FATCA scrutiny. (In that “Shining city on the hill” those who purchase life insurance are clearly “up to no good” – “no good at all!”)

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Captive Cases Series – The Economic Family Doctrine: Moline Properties and Risk Shifting and Risk Distribution

The economic family doctrine was the IRS’ primary legal argument against captive insurance. This theory was developed over a series of internal memorandums which I’ll discuss in a later post. But to understand the economy family doctrine — and the primary arguments against it — there are two legal concepts we need to explain.

The legally separate nature of corporations.

While it seems common sense that a court would treat each corporation as a separate legal entity, this is a concept that had to be established in case law in Moline Properties. The following is from my book:

In Moline, Uly Thompson organized Moline Properties as a Florida Corporation. Thompson Read More

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Clearing Up Common Myths About Life Insurance Proceeds

“The foundation of life insurance is the recognition of the value of a human life & the possibility of indemnification for the loss of that value.” In translation, it means someone pays a premium to an insurance company for someone else to receive a a sum of money on his/her death. The contract can also include a terminal or critical illness. Some life insurance contracts are only for a specified term.

Many people know that having life insurance is important, however are not so sure about the proceeds that are distributed and the tax consequences of such distribution. This post seeks to clear up some of those common myths.

The question, “Are life insurance proceeds taxable?”, elicits the favorite answer of Read More

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