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convinces us that Gleave either kept the $85,000 or used it for
his own purposes, and it is income to Gleave.
(c) Key-Man Insurance
During the years in issue Kenmore issued at least three
checks to Western-Southern Life Insurance Co. as premium payments
on an insurance policy on Gleave’s life. Gleave claims that
these premium payments are not income to him, because this policy
was a key-man life insurance policy.
Generally, life insurance premiums paid by an employer on
the life of its employee, where the proceeds of the insurance are
payable to the employee’s beneficiary, are part of the employee’s
gross income. Section 1.61-2(d)(2)(ii)(a), Income Tax Regs. If
the life insurance policy is an asset of the employer, then it
may be that the premium payments made by the employer are not
income to the employee, even if the employee is also the
employer’s controlling shareholder. Resolution of this matter
involves consideration of various factors. See, e.g., Casale v.
Commissioner, 247 F.2d 440 (2d Cir. 1957), revg. 26 T.C. 1020
(1956);16 Centre v. Commissioner, 55 T.C. 16 (1970); Lacey v.
Commissioner, 41 T.C. 329 (1963); Rev. Rul. 59-184, 1959-1 C.B.
65.
The record in the instant cases does not provide us with the
information that is necessary to decide whether the life
16 The rationale of the Court of Appeals was accepted by
this Court in Centre v. Commissioner, 55 T.C. 16, 20 (1970).
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