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Federal Taxation of the Assignment of Life Insurance

43 Pages Posted: 1 May 2007  

Douglas A. Kahn

University of Michigan Law School

Lawrence W. Waggoner

University of Michigan Law School

Abstract

The most litigated estate tax issue concerning life insurance is whether the proceeds should be included in the insured's gross estate. This question is usually governed by section 2042 of the Internal Revenue Code of 1954, the estate tax provision directed specifically at life insurance. This Article deals with the treatment of various types of transactions concerning life insurance.

One interesting and currently controversial problem is what amount should be included in the insured's gross estate if he gives away a policy within three years of his death but the assignee, not the insured, pays the post-assignment premiums that become due. This Article will explore that issue, along with others arising from the assignment of life insurance, and suggest some solutions.

Keywords: Taxation, Life Insurance, Assignment, Estate Tax, Gross Estate

JEL Classification: H20, H24

Suggested Citation

Kahn, Douglas A. and Waggoner, Lawrence W., Federal Taxation of the Assignment of Life Insurance. Duke Law Journal, Vol. 1977, No. 5, p. 941, December 1977; U of Michigan Public Law Working Paper No. 82. Available at SSRN: https://ssrn.com/abstract=983790

Douglas A. Kahn (Contact Author)

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4043 (Phone)

Lawrence W. Waggoner

University of Michigan Law School ( email )

625 South State Street
Ann Arbor, MI 48109-1215
United States

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