- 21 -
In Cohen v. Commissioner, 39 T.C. 1055 (1963), we consid-
ered, inter alia, the precise issue presented in the instant
case. The pertinent provisions of the respective insurance
policies involved in Cohen are materially the same as the perti-
nent provisions of the respective policies involved here.8 In
Cohen v. Commissioner, supra, we applied the above-quoted respec-
tive regulations under sections 61 and 451 in determining whether
the respective amounts of interest on certain dividend accumula-
tions under the insurance policies involved there were includible
in the gross income of the taxpayer for the taxable year in which
such interest was credited or earned. In holding that such
amounts of interest were so includible, we stated:
With regard to amounts earned by petitioner on
dividends left on deposit with the respective insurance
companies, we find that such amounts are properly
denoted as interest and, upon the periodic crediting of
such interest to the account of the petitioner by the
respective insurance companies, was subject to his
8One of the policies involved in Cohen v. Commissioner, 39
T.C. 1055 (1963), provided in pertinent part: “Under the
Accumulation plan, Dividends are retained by the Company and
accumulated at Interest, compounded yearly * * *. The
Accumulation may be withdrawn within thirty-one days after the
end of any Policy year during the whole of which this Policy
shall have been in force * * *.” Id. at 1056. Another of the
policies involved in Cohen provided in pertinent part: “surplus
distributions [policyholder dividends] may be * * * left on
deposit with the Company to accumulate with interest * * *,
payable with proceeds of the policy or withdrawable in cash on
demand”. Id. at 1057. The remaining policy involved in Cohen
provided in pertinent part: “Each * * * dividend, at the option
of the Owner, shall be * * * left with the Company to accumulate,
with interest * * *, and payable at maturity or on demand.” Id.
at 1058.
Page: Previous 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
Last modified: November 10, 2007