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TAX
CONSIDERATIONS The question
of tax deductibility of insurance premiums paid to captives, as well as the
tax treatment of loss reserves, loss payments, and investment income, is
quite complicated and extremely important to business owners. This requires business owners and Captive
Managers to consult with individuals possessing specialized tax
expertise. Most tax experts would
caution that a company considering a captive arrangement must have a specific
business reason beyond tax considerations for forming the entity in order to
avoid IRS scrutiny. In addition, a
captive may risk tax jeopardy if it is under-capitalized, operates in an
under-regulated jurisdiction, or was obviously set up for tax reasons. |
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F.
Darrell Lindsey State
Approved Captive/RRG Manager |
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BACK – USE ARROW TO PRINT USE PRINT PREVIEW |
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