What is a 953d election?

Section 953(d) allows a controlled foreign corporation engaged in the insurance business to elect to be treated as a U.S. corporation for U.S. tax purposes.

Who pays reinsurance FET?

Federal Excise Tax (FET) — a tax imposed on premium payments to offshore insurers: 4 percent on direct premiums and 1 percent on reinsurance premiums.

Is foreign life insurance taxable?

Income generated from a Foreign Life Insurance Policy is taxable in the United States, and the value of the policy reported to the IRS.

What is a foreign insurer?

Foreign Insurer — from the U.S. perspective, an insurer domiciled in the United States but outside the state in which the insurance is to be written. In effect, it is a domestic insurer doing business outside of the state in which it is domiciled.

How do I make a 953d election?

In order to make a D election, the following must occur. The electing corporation must file an “election statement” to which must be attached a list of all US shareholders as of a date no more than 90 days prior to the date of the statement. The list must be updated each taxable year that the election is in effect.

What are captives in insurance?

Defining Captive Insurance. A captive is a licensed insurance company fully owned and controlled by its insureds – a type of “self-insurance.” Instead of paying to use a commercial insurer’s money, the owner invests their own capital and resources, assuming a portion of the risk.

How is FET calculated?

The FET tax on trucks is 12% of the total sale price that is added on when purchasing a new truck. The 12% Federal Excise Tax could lead up to over $30,000 in extra charges when buying a new truck. Generally, this tax applies to trucks and chassis over 26,000 pounds.

What does FET tax stand for?

FET is an acronym for federal excise tax. It refers to the tax imposed by the federal government on tires used on the road with a maximum load capacity greater then 3500 pounds. Generally this applies to medium truck tires and heavy duty trailer tires.

Do I have to report foreign life insurance?

The IRS requires U.S. person owners of a foreign life insurance policy to report the policy annually, on an FBAR. In recent years, the Internal Revenue Service has taken an aggressive approach to foreign accounts compliance. This includes reporting offshore accounts, assets, investments and life insurance policies.

Are life insurance policies reported to IRS?

Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren’t includable in gross income and you don’t have to report them. However, any interest you receive is taxable and you should report it as interest received.

What is a alien insurer?

Alien Insurer — an insurer domiciled in and licensed under the laws of a country outside a given jurisdiction. For example, from a U.S. perspective, a Bermuda insurer would be an alien insurer.

What is a nonadmitted insurer?

Non-admitted insurance companies are not backed/approved by the state, which means: The company is likely not in compliance with the state’s insurance laws and regulations. Claims to the company may not be paid if the insurer goes insolvent.