Is Officer Life insurance deductible expense on a corporation tax return?

Sabby · #1 (**permalink**) 01-26-2007, 01:05 AM

We have purchased Life insurance paid by my unincorporated business. The premium is quite expensive expensive and I would like to ask you, is this tax deductible?

Also, I may form a C corporation, and am considering making payments from the New C Corporaitons. Is the Life Insurance premium going to be tax deductible when I file my Corporation tax return?

TaxGuru · #2 (**permalink**) 01-29-2007, 06:30 PM

Dear Shabby,

The life insurance premiums paid on behalf of an officer of a Corporation are not deductible for tax return purposes.

They are deducted for books but not for tax purposes and this amount is added back on the M-1 schedule as an ajustment to income.

Sabby · #3 (**permalink**) 01-30-2007, 10:05 AM

Thanks for the reply. At least now I am aware of this.

TaxGuru · #4 (**permalink**) 01-31-2007, 01:19 AM

No problem!