Certain accelerated death benefits to be accorded gross income exclusion

Article Abstract:

Terminally ill insured may pay for medical expenses through accelerated life insurance death benefits. Treasury Dept proposed regulations make qualified accelerated death benefits (QADB) eligible for IRC section 101 death benefit tax exemptions. QADB requirements include that the QADB must be equal to or greater than the reduction in the remaining benefit's present value while the final benefit must be equal to or greater than the remaining death benefit. The insured must also be terminally ill and expected to die within 12 months. However, the financial burden on beneficiaries must be considered.

Planning, Survivors' benefits

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Accelerated death benefits finally afforded exclusion

Article Abstract:

The Health Insurance Portability and Accountability Act of 1996 includes provisions that exclude accelerated death benefits for terminally or chronically ill taxpayers from income taxation. The Act added IRC section 101(g) to identify that these payments should be treated like payments at death for tax purposes. The IRS has already enacted regulations regarding lifetime payment of death benefits, but the IRS was interpreting the regulations inconsistently. The legislation should provide the IRS with clearer statutory authority to draft revised regulations.

Life Insurance, Direct Life Insurance Carriers

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The income tax treatment of damage awards

Article Abstract:

IRC sec. 104(e) excludes a variety of damages awards from income tax treatment. Insurance benefits, workers' compensation, and non-punitive damages are generally excludable, as are certain types of medical care payments related to emotional distress. The income tax treatment of ERISA damages, RICO awards, Title VII damages, and ADEA damages are also discussed.

Public Finance Activities, Personal Income Taxes, Income tax, Personal income tax, Damages, Damages (Law)

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