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Are group term life insurance proceeds taxable to the employer if the policy is on a CEO?

Let's say company A takes a policy of on a CEO. They pay 40,000 in premiums and CEO collects 10,000 in premiums. Upon CEO's death company A collects 1,500,000 and CEO's wife receives 100,000 from life insurance proceeds. What are the tax effects to company A and CEO's wife?

Public Comments

1. Life insurance premiums paid by the employer on policy amounts in excess of $50,000 are taxable income to the employee. The employee's benefit amount is $100k so the premium on the added $50k of coverage is taxable income to the CEO. No way to say how much that would be from the information given. The CEO does not collect premiums, the insurance company does. Where did you come up with the $10k? The $1.5 million payout to the company is taxable income to the company as it appears that the company both owns and is primary beneficiary of the policy. In those cases, the payout is taxable income to the beneficiary. The $100k paid to the spouse is not taxable income to the spouse since the spouse is not the owner of the policy but merely a beneficiary.