2022 Standard Federal Tax Reporter (CCH) Committee Reports on P.L. 98-369 (Deficit Reduction Act of 1984), Congress (United States)

Summary

• Committee Report: Standard Federal Tax Reporter (2022), Committee Reports on P.L. 98-369 (Deficit Reduction Act of 1984)

  .019 House Committee Report

  If a life insurance contract does not meet either of the alternative tests under the definition of a life insurance contract, the income on the contract for any taxable year of the policyholder will be treated as ordinary income received or accrued by the policyholder during that year. For this purpose, the income on the contract is the amount by which the sum of the increase in the net surrender value of the contract during the taxable year and the cost of life insurance protection provided during the taxable year under the contract exceed the amount of premiums paid less any policyholder dividends paid under the contract during the taxable year. The term premiums paid means the amounts paid as premiums under a contract less amounts to which the rules for allocation between income and investment under annuity and other contracts in section...