IRS Clarifies Tax Treatment of Sellers of and Investors in Life Insurance Contracts

May 06, 2009
The Internal Revenue Service recently issued two revenue rulings that provide guidance to life insurance policyholders (insureds) who sell their policies and to investors with no insurable interest in the lives of the insureds. This update examines the rulings and their tax implications for life insurance policyholders as well as U.S. and foreign investors in life insurance contracts.