[20060802]RS20923_税收和人寿保险的“内部积累”：最近的问题.pdf

Congressional Research Service The Library of CongressCRS Report for CongressReceived through the CRS WebOrder Code RS20923Updated August 2, 2006Taxes and the “Inside Build-Up” of LifeInsurance: Recent IssuesDavid L. BrumbaughSpecialist in Public FinanceGovernment and Finance DivisionSummaryMany life insurance policies contain both an insurance component and aninvestment element termed “inside build-up.” The inside build-up receives favorabletax treatment under current law: a tax deferral (postponement) if a policy is surrenderedfor cash prior to death, or a tax exemption if paid out as part of death benefits. In thepast, the tax treatment of inside build-up has received attention in the context ofcongressional consideration of legislation to repeal the federal estate tax. Under currentlaw, assets transferred at death receive favorable tax treatment in the form of a “step-up”in basis. If repeal of the estate tax were to limit or repeal the step-up in basis, taxplanners might consider investment in insurance policies with large inside build-ups asan alternative tax-saving strategy. Taxation of the inside build-up of insurance wouldrule out such a tax planning strategy and would thus