BOLI - IRS Proposes New Transfer for Value Regulation

Update and Potential Correction:

On March 22, 2019, the Internal Revenue Service and the Treasury Department issued proposed regulations that potentially provides the needed clarity regarding circumstances in which bank owned life insurance policies are transferred as part of a bank merger or acquisition.[1] In general, the guidance provides that tax-free transfers of policies between C corporations that do not have more than 50 percent of their assets in BOLI policies are not subject to the new reporting and income inclusion rules. This is an important exception and very good news.