Xử lý thuếCâu 464 / 716
An executive bonus (Section 162) plan generally works by having:
a.All taxes deferred indefinitely for both parties
b.The employer pay (bonus) the premium on a life policy the executive owns, deductible to the employer and taxable to the executive
c.The employer lend money that must be repaid with interest
d.The executive pay every premium out of pocket from after-tax salary, with the employer simply collecting and forwarding the premium payments
Giải thích
In a Section 162 executive bonus plan, the employer pays the premium on a personally owned life insurance policy for a key executive; the employer deducts the bonus as compensation, and the executive reports it as taxable income but owns the policy and its cash value. The executive does not bear the full cost alone, it is a bonus rather than a loan, and taxes are not deferred, the bonus is currently taxable to the executive. Simplicity and employer deductibility make this a popular executive benefit.
Luyện miễn phí toàn bộ 716 câu hỏi — không cần đăng ký.
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Câu hỏi liên quan cùng chủ đề
- Under federal tax rules, employer-paid group term life insurance is income-tax-free to the employee on coverage up to:
- In a cross-purchase buy-sell agreement funded with life insurance, the policies are owned by:
- In an entity (stock-redemption) buy-sell plan, the life insurance is owned by:
- Distributions from a traditional, fully pre-tax qualified retirement plan are:
- A ten percent federal tax penalty generally applies to taxable withdrawals from annuities and qualified plans taken before the owner reaches age:
- Accelerated death benefits paid to an insured who has been certified as terminally ill are generally:
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Đội ngũ PrepPass · Đối chiếu với California Life & Health Insurance License Exam · Quy trình kiểm tra
Người kiểm duyệt John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — kiểm tra)