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be entered is not reviewable by any other court, and this opinion
should not be cited as authority.
Respondent determined a deficiency in petitioners’ Federal
income tax for the taxable year 2001 of $1,342.
The issue for decision is whether a distribution of $8,944
resulting from the surrender of a life insurance policy is
includable in petitioners’ gross income. We hold that it is.
Background
Some of the facts have been stipulated, and they are so
found. We incorporate by reference the parties’ stipulation of
facts and accompanying exhibits.
At the time that the petition was filed, petitioners resided
in Santa Cruz, California.
On July 17, 1987, Kenneth T. White (petitioner) acquired a
universal life insurance policy (the policy) with Pacific Mutual
Life Insurance Co. (Pacific Life).
The policy entitled petitioner to withdraw funds against the
policy’s accumulated value. The policy defined accumulated value
as the net amount of premiums (premiums paid less premium load
charge) plus interest and dividends earned minus deductions
(e.g., withdrawal amounts, mortality charges, administrative
charges, insurance loads, and rider chargers).
The policy also entitled petitioner to borrow against the
policy as collateral up to the loan value available. The policy
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