NU Online News Service, May 9, 2003, 5:35 p.m. EDT — Washington
The Internal Revenue Service is seeking comments on a proposed method for valuing economic benefits under certain equity split-dollar life insurance arrangements.
The new proposed rule is intended to supplement a still pending 2002 proposed rule regarding taxation of split-dollar arrangements.
The 2002 proposal creates two mutually exclusive regimes for taxation of split-dollar arrangements, a loan regime and an economic benefit regime.
The new proposal deals only with the economic benefit regime, under which the owner of the life insurance contract is treated as providing economic benefits to the non-owner.