TAX QUESTIONS? YOU ASK LAH!
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Q: I am a partner of a partnership. I purchased ‘key-man’ insurance policies on the life of the partners, with the partnership as the beneficiary. One partner has passed away due to an accident. Are the insurance proceeds received by the partnership subject to income tax?
A: No. The insurance proceeds are not taxable because the insurance premium was not allowed as a business tax deduction previously.
Wishing you plentiful tax savings!
Zen Chow
YYC Tax Guru
