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Recent Investor Control Revenue Rulings |
August 14, 2004
Previously published on July 30, 2003
The Internal Revenue Service ("IRS") has issued two revenue rulings dealing with the
investor control restrictions, i.e., the IRS's long-standing position, as articulated in Rev. Rul. 81-
225, 1981-2 C.B. 13, and elsewhere, that the owner of a variable life insurance or annuity
contract, not the insurer issuing the contract, is to be treated for tax purposes as the owner of the
underlying assets supporting the contract and is subject to current taxation on those assets if the
contract owner exercises too much control over the assets by directing how the assets are to be
invested.
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The views expressed in this article are solely the views of the author and not Martindale-Hubbell. This article is intended for informational purposes only and is not legal advice or a substitute for consultation with a licensed legal professional in a particular case or circumstance. |
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