Transfer-For-Value Rule
Categories: Accounting
You have a life insurance policy. However, you've fallen on some hard times. Your earthworm farm didn't turn out like you expected, and now you're searching for cash. In order to raise money, you sell your life insurance policy to the guy who owns the live bait store. He gives you $20,000; now he's in line to receive your $50,000 death benefit when you die.
A couple weeks later, you get stuck in a mud hole trying to plant a new crop of worms (you never did understand the business very well). You drown. Now the bait store guy gets the $50,000 benefit.
Here's where the transfer-for-value rule comes into play. Normally, death benefits from insurance don't get taxed. Not even a politician wants to be seen taking cash from widows and orphans. However, that no-tax rule wasn't meant to benefit predatory bait store owners. As a result, the transfer-for-value rule exists. It states that if a life insurance policy gets sold (transferred for anything of value), it loses its no-tax status. The funds received by the bait store guy are now subject to ordinary income tax.
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Finance: What is mortality rate?2 Views
and finance Allah shmoop What is mortality rate Oh and
no we're not talking about the frequency with which Rick
and Morty episodes are aired We're talking about Mort Alice
E Rate which is about death and dying You know
much more of a downer Well the mortality rate is
a rate that measures the number of deaths either in
general or from something specific per some bounded population per
unit of time but most often mortality rates or the
number of deaths per thousand people per year Keeping the
per thousand people and per year makes it easier to
measure mortality rates against each other without having to do
extra math to make all the units equal When working
with bigger populations it may be scaled up to one
hundred thousand people per year For example the maternal mortality
rates of different nations show how many moms die before
during or after childbirth per hundred thousand live birth from
any cause related to pregnancy Well in the US the
maternal mortality rate more than doubled from twelve pregnancy related
deaths per one hundred thousand live births in nineteen ninety
and two thousand to twenty eight pregnancy related deaths per
hundred thousand live burst in two thousand fifteen Poland Iceland
Greece and Finland all boasted only three deaths per hundred
thousand in two thousand fifteen way better than Angola Chat
in Kenya which had over four hundred deaths per one
hundred thousand Yeah no joke Maybe give Mom a quick
call just to say you know thanks Alright so switching
gears literally What about motor vehicle deaths in the U
S Yeah there are a couple of ways we can
look at this one One is deaths per the number
of miles driven and the other is death for the
population Well as society and technology have advanced the number
of miles Americans have been racking up has grown faster
than a population rate will The general trend for both
of these things has been the direction we'd hoped for
Down down down in nineteen twenty one car related deaths
per one hundred million vehicle miles traveled or V MTS
was just over twenty four By nineteen fifty we got
that number down to just over seven and in the
two thousand two tens it's just over one one death
for one hundred million miles Now let's look at the
death rate in terms of the population rather than miles
driven right The more traditional death rate here in nineteen
twenty one card related deaths per one hundred thousand people
is just over twelve By nineteen fifty That number unfortunately
went up to above twenty one Fortunately it's been in
the ten to eleven range in the two thousand ten's
Big Relief As long as a while you're not one
of those eleven Well we can see that the death
rate in terms of miles has gone down sharply There's
the graph The more miles we've driven in the US
the more sharply car related deaths have dropped in terms
of population The stories little rockier car related deaths were
pretty up and down for a while until well around
the nineteen seventies when it started on a mostly downward
trend So our population starts driving Mohr more miles per
person and more people aren't dying So that's good If
car related deaths in nineteen twenty one were twelve per
hundred thousand people and today there's somewhere around ten or
eleven per hundred thousand Well why haven't there been more
laws enacted to prevent death Well even slower speed limits
maybe perhaps laws outlawing driving all together Then we'd have
zero deaths per one hundred thousand miles Well because society
has decided that one car related death for ten thousand
people are one car related death for one hundred million
miles driven is a price worth paying It's a price
worth it at least to everyone But that one dude
who got nailed by the texting team Well mortality rates
live perpetually high in the minds of insurance companies whose
lawyers air always invoked When a fatality occurs right Angry
parents and spouses must find a way to sue the
irresponsible or maybe just unlucky driver so that well they
feel better about Morty or Rick not being around anymore
Besides insurance companies well who else uses mortality rates in
their jobs The military Yes young people mostly men many
who think Oh it won't be me who dies get
sent directly into gunfire after ten thousand of them run
into bullets eight thousand of them return and the mortality
rate yes that would be calculated as twenty percent their
insurance companies militaries and groups advocating for social change like
your new mommy's dying All use mortality rates the truth
is each of us will one day be a mortality
stat or a Morty The question is on which data
table will you be if you're lucky Maybe one of
the boring ones where you died because you're super old
Or maybe you'LL cryogenically freeze your head in case they 00:04:19.98 --> [endTime] ever figure out howto bring you back Maybe