Can someone clarify this once and for all?! I keep reading different statements on this. In some cases insurance companies are fully taxable, in some cases only on profits beyond their discount rates.
Thank you!
insurance companies are taxable however the portion of income that is equivalent to their actuarial rates assumed to meet liabilities are typically not taxable.
Yes, life insurance companies are fully taxable. The big deduction they get is the change in policyholder liabilities, which in turn are a function of discount rates, mortality, lapses, etc.
I could bore you to tears about Canadian life co taxation, but you should really focus on LIII!
not all taxable…don’t they receive dividends tax free in their investment portfolio?
When they’re proftable theyre hold tax exempt bonds. And when not profitable they’ll own taxable bonds.
Yes, just like any other corporation, a life co receives dividends tax-free to avoid the issue of taxing the same income more than once. The point I was trying to make was that a life co fills out a corporate tax return just like all other filers and has to meet the same rules for income, deductions, etc., with some extra rules thrown on to to recognize the nature of the business.
Now get back to studying, you!!! AND YOU KIDS STAY OFF MY LAWN!!!