Unique Split Dollar Concept

[CWG san Diego]

Premium financing plan with contributions that our tax deductible? Has anyone heard of this type of concept? One of our agents presented the creative solution to a business owner client and they loved it. It's even better than section 79 !!!

Do anyone here us premium financing??

 

[ATM]

I have done premium financing but I won't.

I also won't use any program touted as tax deductible life insurance. I have seen 100% of programs that was sold under the same premise eventually blow up in time.

The tax benefits were all dependent on an interpretation of the tax code. And I can guarantee you that Treasury doesn't believe in tax deductible life insurance and neither does congress.

 

[DHK]

The only aspect of premium financing that could (should) be tax-deductible... is the interest payments on the loan to fund the product - as a cost of doing business.

However, because the loan is funding life insurance or an annuity, causes confusion according to the IRS publications.

So I would leave that to the client's CPA to make that determination.

 

[ATM]

The only aspect of premium financing that could (should) be tax-deductible... is the interest payments on the loan to fund the product - as a cost of doing business.

However, because the loan is funding life insurance or an annuity, causes confusion according to the IRS publications.

So I would leave that to the client's CPA to make that determination.

See section 264 (f) of the IRS code. That should help settle any confusion for a clients tax advisers, which I am not. and I do not give tax advice.

I also don't ever tell anyone that they might be able to deduct interest on a loan used to purchase life insurance. I'd like to stay out of arbitration and/or court.