Tax Facts

8775 / Can an employee of a sole proprietor deduct life insurance premiums the sole proprietor pays to insure the life of the sole proprietor?

No. The premiums are nondeductible because they either are personal expenses or expenses allocable to tax-exempt income (the death proceeds).1

1. IRC §§ 262(a), 265(a)(1); see Whitaker v. Commissioner, 34 TC 106 (1960).

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