Tax Facts

265 / If a stockholder pays premiums on insurance on the life of one of the corporation’s officers and the corporation is beneficiary of the proceeds, may the stockholder deduct the premium payments as business expenses?

No.

The premium payments are not related to the taxpayer’s trade or business. The business of the corporation is not the stockholder’s business.1


1. Cappon v. Commissioner, 28 BTA 357 (1933).

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