Section 101(j) of the Internal Revenue Code provides that proceeds of corporate-owned life insurance policies are generally taxable income to the corporation. Fortunately, however, there is a simple, but essential income tax return requirement that makes the proceeds non-taxable.
Rev. Rul. 2011-28 Clarifies that Power of Substitution creating Grantor Trust treatment does not also cause inclusion of life insurance in gross estate under facts presented in the Ruling.