Incident of Ownership

Incident of Ownership

Some aspect of the exclusive possession or control over the disposition or use of property that demonstrates that the person with such exclusive rights has not relinquished them.

A person who has kept the right to change the beneficiaries on his or her life insurance policy has retained an incident of ownership and is, therefore, considered the owner of the policy.

References in periodicals archive ?
6) Regardless of whether the domestic corporation is a general or limited partner in the partnership, the focus should be on who has the core incident of ownership -- the right to vote the foreign shares.
72-307, the IRS held that the power to cancel a group-term life insurance policy solely by terminating employment was not an incident of ownership causing the policy to be included in the insured's gross estate; Rev.
Although the right to reversion, which had previously been excluded from consideration as an incident of ownership, was now added to the list of factors considered incidents of ownership, the sole focus on incidents of ownership now meant that through proper planning it was possible to have a taxpayer furnish the premium payments for an insurance policy on his life without triggering gross estate inclusion.
Such policies may be in the deceased's estate for three years from the date the insured last had an incident of ownership.
2042(21) includes in the gross estate of a decedent any life insurance payable to beneficiaries other than the insured's estate, provided the decedent possessed at his death any incident of ownership in the policy.
2042 provides that if the decedent possessed any incident of ownership at the time of his death, the full amount of proceeds is includible in the gross estate.
A right to repurchase an assigned policy was an incident of ownership.
82-145,(29) the Service reversed this result, stating that because the corporation could borrow against the policy's CSV, it possessed an incident of ownership under Regs.
The major disadvantage in establishing an irrevocable trust is that, since the insured does not have an incident of ownership in the trust, he or she no longer has control over the assets in the trust.
2042(2), the value of a decedent's gross estate includes the proceeds of life insurance on the decedent's life to the extent the decedent possessed an incident of ownership.
However, the IRS has held that a veto power would constitute an incident of ownership if it gave the decedent a legal right to affect the disposition of the insurance proceeds.
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