Choice b is incorrect a regulated investment company

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Unformatted text preview: should Kell deduct for life insurance premiums? a. b. c. d. $20,000 $18,000 $2,000 $0 CPA-02205 Explanation 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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