Which of the Following Is an Explanation for Why Insurance

question 14

Multiple Choice

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

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