Ask Question
BusinessBusiness
24 December, 13:01

A life insurance policy that fails the 7-pay test is considered by the irs to be a modified endowment contract. this type of policy will

+5
Answers (2)
  1. 24 December, 13:28
    0
    A Modified endowment contract, MEC, allows individuals to put large sums of money into a cash value policy which allows the cash to grow under a tax deferment until the insured person dies, then the death benefit will be paid with no income taxes.
  2. 24 December, 13:50
    0
    This type of policy will change living benefits to taxable as ordinary income, in contrast to non-taxable living benefits that are found in life insurance.

    A modified endowment contract (MEC) refers to a tax requirement of a life insurance policy where the policy has been financed with more money than the money which is accepted under federal laws.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “A life insurance policy that fails the 7-pay test is considered by the irs to be a modified endowment contract. this type of policy will ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
What company was a media-market leader in 2013 as a result of its strategy of delivering diverse forms of media content, including books, newspapers, and magazines?
Answers (1)
A subsidy is the opposite of a tax. with a $0.50 tax on ice-cream cones, the government collects $0.50 from buyers for each cone purchased; with a $0.50 subsidy for ice-cream cones, the government pays buyers $0.50 for each cone purchased.
Answers (1)
Land, buildings and equipment are acquired for a lump sum of $ 850 comma 000. The market values of the three assets are, respectively, $ 250 comma 000 , $ 480 comma 000 and $ 180 comma 000. What is the cost assigned to the equipment?
Answers (1)
Which of the following budgetary entries would the town of Geneva make upon adoption of its Special Revenue Fund Budget for the year?
Answers (1)
David's mother is killed in an automobile accident. What type of insurance would provide his family financial support to cover the paid and unpaid work his mother performed?
Answers (1)
New Questions in Business
According to the presentation, the first step in making a major purchase is: A. choosing a salesperson B. determining the features C. you want to do your research D. finding out what the taxes will be
Answers (1)
Bank Corp.'s voting stock is owned by the following individuals: Farber, 25%; Farber's mother, 15%; Farber's father, 40%; and Grosset, an unrelated person, 20%. Farber's sister sold equipment to Bank at a loss.
Answers (1)
A financial analyst is presented with information on the past records of 60 start-up companies and told that in fact only 3 of them have managed to become highly successful. He selected 3 companies from this group as the candidates for success.
Answers (1)
Sal, a production manager, knows that some of his employees are upset with a new corporate policy that eliminates a tuition reimbursement program. As a result, some of these employees are participating in soldiering.
Answers (1)
An investment project provides cash inflows of $1,275 per year for eight years. a. What is the project payback period if the initial cost is $4,100? (Do not round intermediate calculations and round your answers to 2 decimal places, e. g., 32.16.) b.
Answers (1)
Home » Business » A life insurance policy that fails the 7-pay test is considered by the irs to be a modified endowment contract. this type of policy will
Sign Up Forgot Password?