Which of the Following Is an Explanation for Why Insurance

question 60

Multiple Choice

Which of the following is an explanation for why insurance premiums on a key employee are not deductible?

• A)A deduction for the insurance premium would offset taxable income without the potential for the proceeds generating taxable income.
• B)The federal government does not want to subsidize insurance companies.
• C)It is impractical to trace insurance premiums to the receipt of proceeds.
• D)Congress presumes that all expenses are not deductible unless specifically allowed in the Internal Revenue Code.
• E)This rule was grandfathered from a time when the Internal Revenue Code disallowed all insurance premiums deductions.

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Definitions:

Discharged

The process of officially releasing someone from a place where they have been detained, such as a hospital or prison.

Nonpathologic Cyanosis

A condition of blue discoloration of the skin or mucous membranes that is not due to underlying disease, often temporary and benign.

Mucous Membranes

The moist, protective linings of various organs and body cavities, such as the mouth, nose, and lungs, which secrete mucus.

Circumoral Area

Refers to the region around the mouth, including the lips and the immediate surrounding skin.