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:

Behave Differently

The alteration in an individual's actions or reactions in various situations or under different circumstances.

Understand

The ability to grasp the meaning, significance, or nature of something.

People

Human beings collectively, often referred to within the context of social, professional, or cultural groups.

Environmental Factors

External elements such as economic, political, social, and physical conditions that influence individuals or organizations.