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respondent asserts, the policy’s beneficiary was a grantor trust
formed by the Los.
We agree with respondent’s conclusion that section 264(a)(1)
prevents Marlton from deducting the contributions which it made
to its plan to pay the premiums on Ms. Lo’s term life insurance
policy. We do so, however, for reasons different from the reason
espoused by respondent. As we see it, Marlton’s deduction of its
contributions for Ms. Lo’s life insurance policy turns on whether
Marlton35 was “directly or indirectly a beneficiary” of that
policy within the meaning of section 264(a)(1). If it was, the
premiums are not deductible, regardless of whether they would
otherwise be deductible as a business expense. See Carbine v.
Commissioner, 83 T.C. 356, 367-368 (1984) (and cases cited
thereat), affd. 777 F.2d 662 (11th Cir. 1985); Glassner v.
Commissioner, 43 T.C. 713, 715 (1965), affd. per curiam 360 F.2d
33 (3d Cir. 1966); sec. 1.264-1(a), Income Tax Regs.
Respondent asserts that the policy’s beneficiary was the
Los’ grantor trust. We are unable to find that such was the
case. As we view the record, and as we found supra, the
beneficiary of Ms. Lo’s term life insurance policy was the
Marlton Plan. Although the trust to which respondent refers was
indeed the beneficiary of Dr. Lo’s policy, we find nothing in the
35 For the purpose of our inquiry, we view Marlton, a sole
proprietorship, as an alter ego of Dr. Lo, the sole proprietor.
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