Unformatted text preview: should Kell deduct for life insurance premiums?
Choice "b" is correct. $18,000.
Rule: Premiums paid for insurance on an officer's life where the corporation is the owner and beneficiary
of the policy are not deductible.
Rule: Group-term life insurance premiums paid on employees' lives, with the employees' dependents as
owners and beneficiaries of the policies are considered to be a fringe benefit and would therefore be
deductible by the corporation.
Choices "a", "c", and "d" are incorrect, per the above rule. CPA-02206 Type1 M/C 103. CPA-02206 A-D Nov 89 II #48 Corr Ans: D PM#9 R 3-99 Page 33 With regard to consolidated returns, which one of the following statements is correct?
a. The common parent must directly own 51% or more of the total voting power of all corporations
included in the consolidated return.
b. Of all intercompany dividends paid by the subsidiaries to the parent, 70% are excludable from taxable
income on the consolidated ret...
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- Fall '10
- The Land, Taxation in the United States, Educational Development Corp, Type1 M/C, Corr Ans