Key Man Life Insurance Form 1120

Employer owned life insurance contract.

Key man life insurance form 1120. Premiums on the term life insurance policies of janet and kim designated beneficiary is pet kingdom. Any type of life insurance policy can be structured as key man life insurance including either of the two primary categories of life insurance. This assumes that the company is the beneficiary not someone like a spouse or other non business person. It protects your company if one of your foremost employees known as a key person in the policy dies.

These life insurance premiums are viewed as a benefit paid on behalf of the employee so they re deductible as an employee benefit. Sounds like a key person policy. For corporations show these expenses in the deductions section of form 1120. Use form 8925 to report the.

If you have master contracts see section. Officer life insurance premiums are handled in one of two ways for an 1120s. It s also commonly known as key employee insurance or key person insurance. Current revision form 8925 pdf.

Tax us 3 points 4 years ago. It would be a book to tax. Key man life insurance is a common form of corporate owned life insurance coli. Furthermore key man insurance and other employer owned life insurance is specifically covered under section 1 264 1 a and states the premiums paid for life insurance on the life of any officer employee or person financially interested in a business carried on by the taxpayer are not deductible where the taxpayer is directly or indirectly a.

Term life insurance only provides coverage for a predetermined amount of time such as 10 or 20 years and is significantly less expensive than permanent life insurance. If your business operates on a cash basis you may only deduct insurance. Key person life insurance on company officers and executives. Amounts for other deductions are entered on the ded screen in the software.

Not really sure what to do with that information. Number of employees covered by employer owned life insurance contracts issued after august 17 2006. For purposes of form 8925 an insurance contract is an employer owned life insurance contract if it is owned by a policyholder as defined below and covers the life of the policyholder s employee s on the date the life insurance contract is issued. You can take out a key person policy on any member of your team even yourself.

What line to put life insurance premiums.