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(1947); Ellis v. Commissioner, T.C. Memo. 1973-152. However, in
cases where the policy is pure term life insurance, we have held
that the benefits conferred on the payee spouse through the
premium payments were too unascertainable to be taxable to the
payee spouse.2 See Wright v. Commissioner, supra; Brodersen v.
Commissioner, supra.
In Wright v. Commissioner, supra at 385, the husband was
required pursuant to the divorce decree to maintain a 10-year
renewable term life insurance policy on his own life naming his
wife the owner and beneficiary of the policy. Under the decree,
the husband was to maintain the policy until his wife remarried,
reached age 65, or died. See id. at 383-384.
In that case, we held that in determining whether the wife
constructively received the premiums paid by her ex-husband “it
is necessary to examine what obligations are due her under the
policy, as well as whether she is the owner or assignee and
irrevocable beneficiary of the policy.” Id. at 397. We held
that the wife under the term life insurance policy had such
limited rights that she could not be said to have constructively
received an economic benefit from the premium payments. See id.
at 398. This Court focused on the contingent nature of the
2 We note that under post-DEFRA section 71 premium payments
on both whole and term life insurance policies are includable in
the payee spouse’s gross income. See sec. 1.71-1T(b), A-6,
Temporary Income Tax Regs., 49 Fed. Reg. 34455 (Aug. 31, 1984).
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