On April 10, the Obama Administration released its fiscal year 2014 budget (FY 2014 Budget). Of note, the FY 2014 Budget includes a number of tax proposals that target insurance companies or that otherwise would have a direct effect on them. Specifically, the proposals would:
- Modify the dividends-received deduction for life insurance company separate accounts. This proposal is estimated to raise $2.459 billion over 5 years and $5.101 billion over 10 years.
- Disallow a deduction for “non-taxed reinsurance premiums paid to affiliates.” This proposal is estimated to raise $2.621 billion over 5 years and $6.209 billion over 10 years.
- Modify the rules that apply to sales of life insurance contracts. This proposal is estimated to raise $257 million over 5 years and $641 million over 10 years.
- Require information reporting for “private separate accounts” established by life insurance companies. This proposal is estimated to raise $2 million over 5 years and $7 million over 10 years.
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Topics: Barack Obama, Dividends, FATCA, Federal Budget, Financial Crisis Responsibility Fee, Life Insurance, Private Separate Accounts, Reinsurance, Reporting Requirements, Tax Deductions
Published In: General Business Updates, Finance & Banking Updates, Insurance Updates, International Trade Updates, Tax Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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