An owner/insured of a viatical settlement is not subject to income tax on the capital gains of the policy if:

a. The death benefit is less than $1 million.

b. The individual is less than 65 years of age.

c. The individual is terminally ill.

d. Viatical settlements are never tax-free.

Cross-purchase agreements are usually preferred from a tax planning perspective because:

a. They permit the surviving shareholders to increase their basis in the business interest.

b. They will never result in a transfer for value if the owners transfer existing policies to one another.

c. The premiums paid by each owner are tax deductible.

d. The death benefits are taxable to the policy owner, but are then deducted as a business expense.