joanmcq Posted September 26, 2007 Report Share Posted September 26, 2007 Man bought life insurance on his mom. He was the owner of the policy, but named the grandkids and her church as the beneficiaries. His agent is telling him he, as owner of the policy, can take a charitable dedcuction for the $20,000 that went to the church. All I can find is examples of the owner being the deceased, and the estate getting a deduction, but also having to include the income as part of the estate. So does he get a deduction, but not have to claim income, or get a deduction without claiming income, or neither? Quote Link to comment Share on other sites More sharing options...
TaxmannEA Posted September 26, 2007 Report Share Posted September 26, 2007 Man bought life insurance on his mom. He was the owner of the policy, but named the grandkids and her church as the beneficiaries. His agent is telling him he, as owner of the policy, can take a charitable dedcuction for the $20,000 that went to the church. All I can find is examples of the owner being the deceased, and the estate getting a deduction, but also having to include the income as part of the estate. So does he get a deduction, but not have to claim income, or get a deduction without claiming income, or neither? I would say no deduction as life insurance proceeds are usually not taxable income to the benificiaries. He cannot, therefore, deduct the portion that went to the church as it was from funds that are not includable in his gross income. My question would be " would a ratable portion of the premiums paid over the years be considered a charitable deduction in the years paid?". Quote Link to comment Share on other sites More sharing options...
joanmcq Posted September 26, 2007 Author Report Share Posted September 26, 2007 "would a ratable portion of the premiums paid over the years be considered a charitable deduction in the years paid?". I don't think so, because the beneficiaries were revocable. This policy was originally taken out to ensure mom could be taken care of if she needed the money (could take a loan against it). She gifted money to son to buy the policy back in the 80's. But when it was clear she would be ok financially, she directed that the beneficiaries be the church and grandkids. But, however, she was not the owner of the policy and son did not have to do as she directed. Quote Link to comment Share on other sites More sharing options...
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