When Are Premiums Paid to a Captive Insurance Company Deductible for Federal Income Tax Purposes?

In an article published by Captive.com, Eversheds Sutherland attorneys Saren Goldner, Kriss Rizzolo, and Bruce Wright examine when premiums paid to a captive insurance company are deductible for federal income tax purposes. The authors explain that deductibility turns on whether the captive arrangement will be respected as “true insurance,” focusing on factors such as risk transfer, risk distribution, and alignment with commonly accepted notions of insurance under IRS guidance and case law.

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