- 4 -
petitioner was drawn on an account in the name of "Stable
Reserve, Inc." Petitioner instructed Schwab to delay the deposit
of petitioner's $40,653 premium check to Royal for a few days in
order to permit petitioner's deposit of the $40,653 Stable
Reserve check from Schwab to fund petitioner's check.
In addition to remitting the two checks, petitioner signed a
document that contained the recitation that the $40,653 check
payment to him from Stable Reserve (Schwab) was a nonrecourse
loan. Petitioner and Schwab understood that the signed document
reciting the existence of a nonrecourse loan was prepared and
executed in the event that the Internal Revenue Service looked
into their insurance transaction and that the document had no
substance or effect. Beginning in 1991, petitioner and his
beneficiary(ies) had the benefit of $1,250,000 in life insurance
coverage from Royal. The coverage was under a universal life
policy, which differs from a whole life policy in that a
universal life policy more closely reflects current interest
rates thereby improving the accumulation of cash value. The
$40,653 premium paid by petitioner was competitive with the
premium charged by insurance companies other than Royal. Schwab,
in turn, was entitled to a commission approximating 118 percent
of the $40,653 1-year's premium on petitioner's Royal life
insurance policy.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011