Which of the Following Is an Explanation for Why Insurance

question 72

Multiple Choice

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

• A) The insurance deduction 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 IRC disallowed all insurance premiums deductions.

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Definitions:

Federalist Party

An early American political party advocating for a strong federal government, and prominent in the late 18th to early 19th centuries.

Hartford Convention

An assembly of New England Federalists during the War of 1812, which discussed grievances against the U.S. government's war policies.

Popular Self-Government

The principle or practice where the people govern themselves directly or through elected representatives, forming the basis of democratic societies.

War of 1812

A conflict fought between the United States and the British Empire from 1812 to 1815, primarily over British restrictions on American trade and America's desire to expand its territory.