Tax Facts

223 / When a life insurance policy has been given away, are premiums subsequently paid by the donor gifts of a present interest qualifying for the annual exclusion or are they a future interest?

The payment of premiums is a gift of a present interest if the gift of the policy was a present interest gift. Likewise, the premium is a future interest gift if the gift of the policy was a future interest gift ( Q 212).1

1.     Baer v. Commissioner, ¶ 43,294 P-H TC Memo (1943), aff’d, 149 F.2d 637 (8th Cir. 1945); Roberts v. Commissioner, 2 TC 679 (1943); Commissioner v. Boeing, 123 F.2d 86 (9th Cir. 1941); Bolton v. Commissioner, 1 TC 717 (1943).

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