Matthies v. Comm'r
United States Tax Court
A profit-sharing plan of Ps' wholly owned S corporation bought a life insurance policy on Ps' lives with funds rolled over from H's IRA. The profit-sharing plan later sold the policy to H for $ 315,023, which slightly exceeded the policy's cash surrender value, net of a $ 1,062,461 surrender charge. For income tax purposes, Ps valued the policy at its net cash surrender value and reported no gain on the transaction.
Read the full summary
A profit-sharing plan of Ps' wholly owned S corporation bought a life insurance policy on Ps' lives with funds rolled over from H's IRA. The profit-sharing plan later sold the policy to H for $ 315,023, which slightly exceeded the policy's cash surrender value, net of a $ 1,062,461 surrender charge. For income tax purposes, Ps valued the policy at its net cash surrender value and reported no gain on the transaction. R determined that the policy should be valued without any reduction for surrender charges and that the bargain sale of the insurance policy gave rise to taxable income to Ps.…
1Opinion of the Court
KARL L. MATTHIES AND DEBORAH MATTHIES, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Matthies v. Comm'r
No. 22196-07
United States Tax Court
134 T.C. 141; 2010 U.S. Tax Ct. LEXIS 6; 134 T.C. No. 6;
February 22, 2010, Filed
A profit-sharing plan of Ps' wholly owned S corporation bought a life insurance policy on Ps' lives with funds rolled over from H's IRA. The profit-sharing plan later sold the policy to H for $ 315,023, which slightly exceeded the policy's cash surrender value, net of a $ 1,062,461 surrender charge. For income tax purposes, Ps valued the policy at its net cash…
2Cases cited23 opinions
- Welch v. HelveringSupreme Court of the United States · 1933
- Neely v. CommissionerUnited States Tax Court · 1985
- Commissioner v. LoBueSupreme Court of the United States · 1956
- Commissioner v. SmithSupreme Court of the United States · 1945
- Guggenheim v. RasquinSupreme Court of the United States · 1941
18 more not listed; retrieve them via the Exa API.