All of the statements regarding the taxation of insurance


All of the statements regarding the taxation of insurance policies are correct, except:

a. When a new policy is bought for another person, the gift tax value is the gross premium paid by the donor.

b. When a single policy is gifted jointly to two children, the transfer qualifies for two annual exclusions.

c. When premiums are paid on behalf of a policy owner, the premium payments are gifts subject to gift taxes.

d. When a grandparent transfers a policy directly to a grandchild, the transferor can use annual exclusions to reduce any taxable gifts and GST taxes.

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Financial Management: All of the statements regarding the taxation of insurance
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