SCOTUS Decides Valuation of Corporate-Owned Life Insurance

Business Valuation UpdateVol. 30 No. 7
July 2024
Roger J. Grabowski, FASA
estate and gift taxation
estate and gift tax, estate & gift, insurance

Summary

In a unanimous decision, the United States Supreme Court sided with the 8th Circuit and ruled that the life insurance proceeds payable to a corporation that was to be used to redeem the deceased shareholder’s stock should be included in the deceased’s estate when calculating the value of the stock the deceased owned. The redemption liability did not offset the life insurance proceeds. This article is a summary of the decision and some observations.