税务处理第 707 / 716 题
The main tax disadvantage of a Modified Endowment Contract (MEC) is that:
a.The premiums the owner pays into the contract suddenly become fully tax-deductible on the owner's personal income tax return
b.The death benefit becomes taxable
c.Living distributions such as loans and withdrawals are taxed on a LIFO basis, with a possible 10% penalty before age 59 1/2
d.It can no longer pay policy dividends
解析
A MEC loses favorable living-benefit treatment: loans and withdrawals are taxed earnings-first (LIFO) and may carry a 10% penalty before 59 1/2. The death benefit itself remains income-tax-free.
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审核人 John Zihao Zhang — California-Licensed Life Insurance Agent (CA Dept. of Insurance License #4396095 — 核实)