A taxing dilemma
Article Abstract:
The Internal Revenue Service's Internal Revenue Code section 845 requires insurance companies to analyze their reinsurance agreements, especially regarding transactions between related entities. Unrelated entities should also carefully analyze their reinsurance transactions if they have a tax-avoidance effect on either party of a transaction. In its audits of reinsurers, the Internal Revenue Service is using section 845 aggressively to limit any tax benefits received from reinsurance agreements.
Publication Name: Best's Review Property-Casualty Insurance Edition
Subject: Insurance
ISSN: 0005-9714
Year: 1993
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Structured for success
Article Abstract:
Structured settlements for Treasury bonds are favored by creditors because of recent IRS tax law changes favoring investment reliability instead of yield. Tax legislation passed in 1988 indicates creditors can foreclose on funding portfolios of insolvent insurance companies. Foreclosures frequently result in negotiated structured settlements for payment of debt. Periodic payments from structured settlements on Treasury bonds can sometimes incur interest rates of 7.47%.
Publication Name: Best's Review Property-Casualty Insurance Edition
Subject: Insurance
ISSN: 0005-9714
Year: 1993
User Contributions:
Comment about this article or add new information about this topic:
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