Policyholder dividends from a whole life insurance policy are generally tax exempt. In which of the following situations would the policyholder dividend be tax exempt?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Policyholder dividends from a whole life insurance policy are generally tax exempt. In which of the following situations would the policyholder dividend be tax exempt?

 
 
A)
The dividend is from a MEC and is received in cash.
 
 
B)
The policyholder dividends exceed premiums paid.
 
 
C)
The policyholder receives dividends that are less than the investment in the contract.
 
 
D)
The policyholder receives dividends greater than the investment in the contract.
 
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