NO & YES

D/I premiums for a Buy & Sell program are NOT Income Tax deductible
If they are OWNED by the Individuals, which then make the Benefits
Non Income Taxable to the Individual. However, IF the contracts are
OWNED by a Corporation, then they are considered a tax deductible
Business Expense, and any benefits paid to the Corp. ARE Income Taxable.


D/O/E on the other hand IS considered to be a business expense, and
therefore Income Tax Deductible coverage, and the Benefits when received
do NOT create any Income Tax. (NOTE, I did NOT say that they were NOT
Income Taxable). An O/E policy is designed to pay to the Insured (or Owner)
an Income commensurate with his/her business EXPENSE. Therefore although
the benefit is TAXABLE, that TAX is offset by the corresponding EXPENSE, ergo NO TAX............
Cal Lester CLU


- quote -

The following was cross-posted. Since the poster used a NON-WORKING
email address, he will not receive the bounce-back message and is
probably scratching his head about why his post did not make it
<grin> . Because the Moderator had both time and empathy, here is his
message with corrected headers.

begin copy----------------

Subject: Disability Insurance
From: KSB <nospam[at]nospam.net

Are the premiums for disability buy out and/or disability overhead
expense policies for a small business tax deductible?

What about the benefits when received?


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-HW "Skip" Weldon
Columbia, SC