Several commentators argued that determining tax ownership based on whom the parties name as the policy owner of the life insurance contract represents a departure from general tax principles. Under this rule, the economic benefit regime applies to the split-dollar life insurance arrangement from the date of the transfer and the payments made (both before and after the transfer) are not treated as split-dollar loans on or after the date of the transfer. One commentator asserted that there is no authority under section 7872 to treat payments made pursuant to split-dollar life insurance arrangements as loans.
It would be inappropriate to limit current taxation to circumstances that constitute transfers of property under section 83, and it would be inappropriate in this context to apply section 83 to circumstances that give rise to income under other Code provisions or judicial doctrines. Section 83 applies only in connection with a transfer of property, but a non-owner may have currently includible income by reason of another rule — such as the doctrines of constructive receipt, cash equivalence, or economic benefit. Similarly, for example, the non-owner has access if the non-owner can anticipate, assign (either at law or in equity), alienate, pledge, or encumber the policy cash value or if the policy cash value is available to the non-owner’s creditors by attachment, garnishment, levy, execution, or other legal or equitable process.
The Definition and Origin of Periodic Sentences
(F) A change made solely under the terms of any agreement (other than the life insurance contract) that is a part of the split-dollar life insurance arrangement if the change is non-discretionary by the parties and is made pursuant to a binding commitment (whether set forth in the agreement or otherwise) in effect on or before September 17, 2003; (iii) R must include in income the premiums paid by E during the years the split-dollar life insurance arrangement is in effect, including the $500 of the premium E paid in year 5 with proceeds of the policy owner dividend. (i) The facts are the same as in Example 2 except that in year 7, R and E modify the split-dollar life insurance arrangement to provide that, upon termination of the arrangement or E’s death, R will be paid the lesser of 80 percent of the aggregate premiums or the policy cash value of the contract.
Subjects (
If you find yourself writing a long string of thoughts without breaks, it’s time to insert a period to divide them into separate sentences. With a few helpful tips, you’ll soon master the art of using “Periodic” correctly in your sentences. These sentences are effective in drawing attention to key information, making them a valuable tool for https://waterleakage.minasatech.com/2021/05/25/adjusting-journal-entry-definition-purpose-types/ writers looking to convey complex ideas or build anticipation for a conclusion. Periodic sentences consist of a main clause at the end, preceded by other grammatical structures.
It is hoped that having such a policy will lead to greater ethical awareness, consistency in application, and the avoidance of ethical disasters. Critics say the proponents of contract theories miss a central point, namely, that a business is someone’s property and not a mini-state or a means of distributing social justice. Professors Thomas Donaldson and Thomas Dunfee proposed a version of contract theory for business, which they call integrative social contracts theory. This approach has become especially popular subsequent to the revival of contract theory in political philosophy, which is largely due to John Rawls’ A Theory of Justice, and the advent of the consensus-oriented approach to solving business problems, an aspect of the “quality movement” that emerged in the 1980s. Some theorists have adapted social contract theory to business, whereby companies https://vokta.tv/2025/03/18/right-of-use-asset-lease-liability-explained-w/ become quasi-democratic associations, and employees and other stakeholders are given voice over a company’s operations.
Loose sentences
(3) Split-dollar demand loans—(i) In general. (iii) Under paragraph (e)(3) of this section, the amount of forgone interest deemed paid to B by T in 2009 is $1,500 ($30,000 x 0.05 – 0). (ii) Based on the relationships among the parties, the effect of the below-market split-dollar loan from X to T is to transfer value from X to B and then to transfer value from B to T. Under section 7872(d)(1), however, the amount of forgone interest deemed paid to B by A is limited to $1,100 (A’s net investment income for the year).
How Are Periodic Sentences Used?
After a transfer of an entire life insurance contract, the transferee generally becomes the owner for Federal income, employment, and gift tax purposes, including for purposes of these final regulations. The same principle applies where death benefit proceeds under a life insurance contract subject to a split-dollar life insurance arrangement are payable to a beneficiary of a service provider who is a non-owner, except that the death benefit proceeds would constitute a compensation payment to the service provider for past services rather than a corporate distribution. Accordingly, an employee of a tax-exempt organization or of a state or local government may have to include an amount in gross income attributable to an equity split-dollar life insurance arrangement even if the employee does not have current access to the policy cash value under these regulations. Taxpayers should note that, in certain cases, a separate tax rule may require a non-owner to include an amount in gross income under an equity split-dollar life insurance arrangement at a time earlier than would be required under these regulations. Policy cash value is inaccessible to the owner’s general creditors if, under the terms of the split-dollar life insurance arrangement or by operation of law or any contractual undertaking, the creditors cannot, for any reason, effectively reach the policy cash value in the event of the owner’s insolvency. The final regulations retain the approach of using two mutually exclusive regimes — an economic benefit regime and a loan regime — for determining the tax treatment of split-dollar life insurance arrangements.
Section 147(e) does not define the term “airplane.” When a word is not defined by statute, it is construed in accord with its ordinary and common meaning. Section 141(e) provides, in part, that the term “qualified bond” includes any private activity bond that (1) is a qualified 501(c)(3) bond; (2) meets the applicable requirements of § 146; and (3) meets the applicable requirements of each subsection of § 147. Section 141 provides, in part, that a bond is a private activity bond if the bond is issued as part of an issue that meets the private business use test of § 141(b)(1) and the private security or payment test of § 141(b)(2).
Periodic sentences are designed to hold the reader’s attention by postponing the main clause until the conclusion. Periodic sentences build upon the readers’ curiosity as they navigate through the sentence’s details and context before reaching the main idea. These sentences are recognized for their rhetorical prowess and have been utilized by prolific writers to enhance their prose with stylistic flair and suspense.
- After consideration of all comments, the 2002 and 2003 proposed regulations are adopted as amended by this Treasury decision.
- The delayed climax of periodic sentences builds anticipation, making them ideal for vivid descriptions.
- Great periodic sentences use imagery as handrails for readers navigating complex structures.
- If, however, the loan is a below-market split-dollar loan, then, except as provided in paragraph (e)(5)(v) of this section, forgone interest is determined annually, similar to a demand loan, but using an AFR that is appropriate for the loan’s term and that is determined when the loan is issued.
- (i) For each year that the split-dollar demand loan was outstanding in which the loan was a below-market split-dollar demand loan, the excess of the amount of interest payable at the stated rate over the interest actually paid allocable to that year; plus
- (i) In year 1, donor D and donee E enter into a split-dollar life insurance arrangement as defined in paragraph (b)(1) of this section.
The insurance company funded its obligation with an annuity payable directly to the taxpayer. The taxpayer was given no immediate right to a lump sum amount and no control of the investment of the amount set aside to fund the insurance company’s obligation. The court held that the taxpayer received compensation in 1945 in an amount equal to the value of the amount transferred to the trust for the taxpayer’s benefit because such transfer to the trust provided the taxpayer with an economic benefit. The taxpayer was the trust’s sole beneficiary.
The periodic sentence acts as the pure juxtaposition of this type of sentence as it will push the main idea at the end of the statement instead. A periodic sentence is a type of sentence one can write that will emphasize the main idea or point of the sentence by adding additional information and having a strict sentence structure. After https://demo.wixis360.com/construction_new/2022/04/05/compare-us-accounting-services-quotes-5/ you have finished creating or crafting the periodic sentence you must edit or have someone proofread the contents of your periodic sentence. When you have finished your preparation for your periodic sentence, you will now start to write the periodic sentence. The outline will also help provide you with a working format that you can use to write or create your periodic sentence.
Until the Commissioner prescribes otherwise, the written representation that is required by paragraph (d)(2)(i) of this section must meet the requirements of this paragraph (d)(2)(ii). The Commissioner may prescribe the time and manner for providing the written representation required by paragraph (d)(2)(i) of this section. In certain circumstances, an indirect participant may be allowed to deduct qualified stated interest, OID, or imputed interest on a deemed loan. The borrower may not deduct any qualified stated interest, OID, or imputed interest on a split-dollar loan.
The valuation date is the last day of the non-owner’s taxable year, unless the owner and non-owner agree to instead use the policy anniversary date as the valuation date. (iii) The value of any economic benefits not described in paragraph (d)(2)(i) or (ii) of this section provided to the non-owner (to the extent not actually taken into account for a prior taxable year). The value of the economic benefits provided to a non-owner for a taxable year under the arrangement equals— Depending on the relationship between the owner and the non-owner, the economic benefits may constitute a payment of compensation, a distribution under section 301, a contribution to capital, a gift, or a transfer having a different tax character. Under the terms of the arrangement and applicable state law, the policy cash value is fully accessible by R and R’s creditors but T has the right to borrow or withdraw at any time the portion of the policy cash value exceeding the amount payable to R. E is the insured under the life insurance contract.
- (C) Transfers of an undivided interest in a contract.
- Notwithstanding paragraph (e)(5)(iii)(A)(1) of this section, this paragraph (e)(5)(iii) does not apply to a split-dollar loan described in paragraph (e)(5)(v)(A) of this section (regarding a split-dollar loan that is payable on the later of a term certain and the date on which the condition to perform substantial future services by an individual ends).
- (2) Investment in the contract—(i) To the non-owner.
- See paragraph (e)(5)(ii)(C) of this section to determine the loan’s term.
- Notwithstanding paragraph (c)(1)(i) of this section—
- While not as dramatic or suspenseful as periodic sentences, they offer a sense of transparency and make for more effortless reading.
- R and E enter into an arrangement under which R will pay all the premiums on the life insurance contract until the termination of the arrangement or E’s death.
No amount received by a lender with respect to a split-dollar loan is treated as an amount received by reason of the death of the insured. Any amount treated as received by the borrower under this paragraph (m) is subject to other provisions of the Internal Revenue Code as applicable (for example, sections 72 and 101(a)). Under the contingent split-dollar method, T must include in income $3,289.52 upon resolution of the contingency ($27,000 positive adjustment minus $23,710.48).
This term is most commonly used in a ruling that lists previously published rulings that are obsoleted because of changes in laws or regulations. As a result of this review, the Service has determined that the test procedures and results used by taxpayers are scientifically valid if the procedures are applied in a consistent and unbiased manner. The potential for the avoidance of Federal taxes by the distributing or controlled corporation (or a corporation controlled by either) is relevant in determining the extent to which an existing corporate business purpose motivated the distribution. Entity is an organization exempt from Federal income tax under § 501(a) as an organization described in § 501(c)(3).
Section 61 provides that, except as otherwise provided by the Code, gross income includes all income from whatever source derived. Under an Agreement, the assignment company is the owner of the annuity, which is subject to claims of the general creditors of the assignment company. The particular needs of a claimant also may be taken into account in determining the award amount. The claimant then has 21 days to either accept the award determination or appeal it by requesting a hearing before the Special Master. Once the Special Master makes an award determination, the claimant is notified in writing. The Special Master, within 120 days of his determination that the claimant’s application is substantially complete, must determine (1) whether the claimant is entitled to an award and (2) the amount of the award.
Employing a variety of sentence structures will help maintain the reader’s engagement while preventing monotony. These sentence structures excel in establishing an argument, delivering a punchline, or focusing the reader’s attention on a central idea that culminates at the end of the sentence. The key is to balance these various sentence structures to create engaging and dynamic writing that captures and retains the reader’s interest. Because of its straightforward structure, a loose sentence often reads as more relaxed and conversational. An overly convoluted sentence may deter readers, while one that is too simple may lack impact.
G takes the reversal into account in determining adjusted gross income. (ii) Under the contingent split-dollar method, when the loan is repaid, there is a $15,000 positive adjustment ($15,000 actual payment minus $0 projected payment). (iv) In accordance with section 7872(b)(1) and paragraph (e)(4)(iv) of this section, what is a periodic sentence on the date the loan is made, T is treated as transferring to G $23,710.48 (the imputed transfer) as compensation. Under this method, the projected payment schedule for the loan provides for a noncontingent payment of $100,000 and a projected payment of $0 for the contingent payment (because it is the lowest possible value of the payment) on December 31, 2013. On December 31, 2013, T will be repaid an amount equal to the premium payment plus an amount based on the increase, if any, in the price of a specified commodity for the period the loan is outstanding. This reversal is taken into account in determining adjusted gross income.
The sentence unfolds gradually, building suspense and holding readers’ attention as they anticipate the main point or conclusion. The first example (“He hated his boss…”) is an example of a loose sentence being used for emphasis. On the other hand, building up the reader’s expectations and then matching them can make for a sentence that feels satisfying and cozy. If you’ve ever been accused of writing a run-on sentence, it was likely a compound-complex sentence. In order to understand what that actually means, let’s quickly look at some examples of the different sentence types. Dependent clauses with no independent clause become sentence fragments, which really just means “an incomplete sentence.”
To the same extent, T must include in income, and G is entitled to deduct, $15,000 to reverse their respective prior tax consequences imposed under paragraph (e) of this section (T’s prior deduction for imputed compensation deemed paid to G and G’s prior inclusion of this amount). Under paragraph (j)(4) of this section, because T accrued imputed interest under section 7872 on this split-dollar loan to G and this interest would not have accrued in the absence of section 7872, T is not required to include the positive adjustment in income, and G is not treated as having interest expense for the positive adjustment. (iii) Based on the projected payment schedule and a discount rate of 7 percent, compounded annually (the appropriate AFR), the present value of the payments under the loan is $76,289.52. The projected payment schedule for the loan includes all noncontingent payments and a projected payment for each contingent payment. If a split-dollar loan provides for one or more contingent payments, then the parties account for the loan under the contingent split-dollar method. (B) The loan is described in paragraph (e)(5) of this section (relating to certain split-dollar term loans, such as a split-dollar term loan payable not later than the death of an individual).