Below is information about IS OFFICER LIFE INSURANCE DEDUCTIBLE S CORPORATION 2 OWNER from a variety of sources. Please take a look at the materials that our team has selected for you.
https://bizfluent.com/info-7899714-life-premiums-tax-deductible-corp.html#:~:text=These%20are%20referred%20to%20as%20corporate-owned%20life%20insurance%2C,life%20insurance%20proceeds%20and%20payments%20that%20it%20receives.
https://www.thetaxadviser.com/issues/2016/apr/life-insurance-and-s-corporation-rules-present-opportunity-and-peril.html
As discussed, premiums are not deductible. Nonetheless, S corporation shareholders must reduce stock basis for their allocable shares of that expense (Sec. 1367(a)(2)(D)). The big question, however, is whether that nondeductible expense reduces the accumulated adjustments account (AAA) or the other adjustment account (OAA).
https://www.irs.gov/businesses/small-businesses-self-employed/s-corporation-compensation-and-medical-insurance-issues
Treating Medical Insurance Premiums as Wages Health and accident insurance premiums paid on behalf of a greater than 2-percent S corporation shareholder-employee are deductible by the S corporation and reportable as wages on the shareholder-employee's Form W-2, subject to income tax withholding.
https://support.businessasap.com/article/261-s-corporation-officer-health-insurance
Health and supplemental insurance premiums paid by an S corporation on behalf of a shareholder may be deductible from an officer's W-2 wages. Prior to your final payroll of the year, please share the total cost of your health and/or accident insurance premiums and HSA amounts with ASAP to report on your W-2.
https://bizfluent.com/info-7899714-life-premiums-tax-deductible-corp.html
If the S corporation is the beneficiary, the premiums are not deductible. The S corporation must also sometimes report life insurance premiums as taxable wages paid to the employee. Deductible Life Insurance Premiums As long as employees are the beneficiaries, S corporations are allowed to deduct life insurance premiums.
https://cs.thomsonreuters.com/ua/ut/2018_cs_us_en/utwapp/kb/1120-us-officer-life-insurance-for-s-corporation-on-schedule-m-2.htm
Although the Revenue Ruling does not explain its reasoning, it would seem that even though no deduction is allowed for premiums paid on any life insurance policy where the taxpayer is directly or indirectly the beneficiary, the nondeductible expense does not reduce the S Corporation's AAA because it is related to tax-exempt income.
https://pocketsense.com/officer-life-insurance-deductible-8558318.html
Officer and employee life insurance are deductible to the company if the officers and employees themselves are the beneficiaries. However, this doesn't provide any financial benefit for the company in the event of a death. If the company itself is a beneficiary under the contract, the premiums are not deductible.
https://kb.drakesoftware.com/Site/Browse/11106/1120S-Officer-Life-Insurance
Officer life insurance premiums are handled in one of two ways for an 1120S. If the corporation is not the owner of the policy nor a beneficiary, then the premiums paid are included in other deductions for line 19. Amounts for other deductions are …
https://dmlo.com/fringe-benefits-rules-for-s-corporation-shareholders/
Pre-tax payroll deductions cannot be used by 2% S corporation shareholders to reimburse plan contributions paid by the company. However, 2% owners can take a corresponding self-employed deduction for the cost of their health savings account contributions on their Form 1040. Short-term and long-term disability premiums
https://www.bnncpa.com/resources/reporting-life-insurance-transactions-by-s-corporations/
Example 1: An S corporation acquires a life insurance policy with cash value on a key person and pays premiums of $10,000 per year for five years. Each annual premium includes $1,500 of cost of insurance and $8,500 of investment. At the end of the fifth year, the basis of the policy is $42,500, and the investment in the contract is $50,000.
https://affordablelifeusa.com/tax-deductible-life-insurance/
The premiums you pay for life insurance policies intended to provide for your family in the event of your death are not tax-deductible, even if you pay the premiums from your business checking account. However, if you have a life insurance policy for protecting your business assets, life insurance premiums are tax-deductible.
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