Treatment on premiums paid by employer for employee

Beneficiary Premiums paidby Employer

Case 1 Employee, family Taxable to employee (Compensation)
Case 2 Employer Nontaxable to employee
Divergent
2016 2017
Annual rental 240,000 240,000
Annual real property tax 60,000 60,000
Income from leasehold improvements
Gross income 300,000 300,000
Less: Depreciation
Taxable income
Spread Out Method

Annual rental 240,000 240,000

Annual real property tax 60,000 60,000
Income from leasehold improvements
Gross income 300,000 300,000

Cost
Depreciation until end of lease term (10 years)
Book value at end of lease term
Remaining lease term
Annual income from leasehold improvements

Cost
Depreciation until end of lease term
55 72
Book value at end of lease term, 10/31/200F
No. of months
Monthly income
Months from 03/31/200B to 12/31/200D
Income already recorded prior to pretermination

Cost
Depreciation until 12/31/200D
33 72
Book value at 12/31/200D
Additional income

Taxable
Income
Ramon
Athlete of the year
Prize 5,000
Olympic medal
Cash award
Nissan
Sweepstake 100,000
Gamblings 500,000
Total 605,000

Proceeds
Premiums paid
Taxable

NO. 1
Proceeds 2,000,000
Premiums (500,000)
 Taxable income 1,500,000

NO. 2
Nontaxable income 2,000,000

Taxable income - Twinkle - zero

Proceeds
by Employer Deductible expense? Death
loyee (Compensation) Yes Nontaxable to employee's fa
employee No Nontaxable to employer

Gross profit
Add: Other income, except bad debt recovery
Less: expenses, exept accounts written off
Income before BDW and excluding BDR
 Year 1 Year 2
Income before
BDW and 100,000 (20,000)
excluding
Bad debt BDR
write o (25,000) (10,000)
75,000 (30,000)
Bad debt recovery 25,000
Bad debt recovery
Taxable income 75,000 (5,000)
 2018 2019 2,020 2,021 2,022 2,023
240,000 240,000 240,000 240,000 240,000 240,000
60,000 60,000 60,000 60,000 60,000 60,000
3,000,000
3,300,000 300,000 300,000 300,000 300,000 300,000
200,000 200,000 200,000 200,000 200,000 200,000
3,100,000 100,000 100,000 100,000 100,000 100,000

240,000 240,000 240,000 240,000 240,000 240,000

60,000 60,000 60,000 60,000 60,000 60,000
100,000 100,000 100,000 100,000 100,000 100,000
400,000 400,000 400,000 400,000 400,000 400,000

3,000,000
(2,000,000)
1,000,000
10
100,000

300,000

(229,166.67)
31/200F 70,833
55
1,288
33
etermination 42,500

300,000

(137,500)
162,500
(42,500)
 120,000

Nontaxable
Income Remarks
50,000
100,000
Normal
500,000
250,000
1,000,000 Donor's tax
Final
Final
1,900,000

500,000
450,000
50,000

C
 Proceeds
Outlived
Taxable to employee (excess)
Taxable to employer (excess)

xxxx
bad debt recovery xxxx
unts written off (xxxx)
cluding BDR xxxx
Year 3

50,000
(5,000)
45,000
3,000

48,000
 2,024 2,025 2,026 2,027
240,000 240,000 240,000 240,000
60,000 60,000 60,000 60,000

300,000 300,000 300,000 300,000

200,000 200,000 200,000 200,000
100,000 100,000 100,000 100,000

240,000 240,000 240,000 240,000

60,000 60,000 60,000 60,000
100,000 100,000 100,000 100,000
400,000 400,000 400,000 400,000