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Taxation of Group Term Life Insurance

Sean is 42 years old. His employer provides him with $300,000 of group term life insurance as a fringe benefit. The policy costs his employer $40 per month. For tax purposes, how much income does Sean have if

a. the benefit is provided on a nondiscriminatory basis?

b. the benefit discriminates in favor of key employees, but Sean is not a key employee?

c. the benefit discriminates in favor of key employees and Sean is considered a key employee?

Please use excel

Solution Summary

This solution discusses the way an employee's group term life insurance benefit is taxed if the plan is discriminatory or non-discriminatory, and if the employee is or is not a key employee.