Court Affirms That Taxpayers Realized Income on Application of Life Insurance Cash Value to Outstand
Updated: Dec 10, 2019
The 10th Circuit Court of Appeals has affirmed a decision of the U.S. Tax Court (see McGowen v. Commissioner, T.C. Memo. 2009-285), that a Taxpayer realized income from indirect life insurance distributions, and that they could not claim that such distributions were excludable from income as “discharge from indebtedness” under § 108 of the Internal Revenue Code because they were not insolvent at the time.