Which of the Following Is an Explanation for Why Insurance

question 46

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 Internal Revenue Code disallowed all insurance premiums deductions.

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Definitions:

Green Grocer

A retailer specializing in the sale of fresh produce, including fruits and vegetables.

Failure of Consideration

A situation where the promised performance in a contract is not fulfilled, making the contract voidable.

Breach of Contract

The failure to fulfill the terms or obligations outlined in a contract.

Fraud in the Inducement

A deceitful practice to mislead someone into entering a contract, undermining the agreement's legitimacy.