Which of the following statements concerning the use of life insurance in a buy-sell agreement is correct? Question 3

options:

a) The death benefit will be subject to income tax if it is payable to a corporation.

b) The premiums are deductible when paid by a corporation.

c) The total premiums paid are cost basis for determining the tax on the death benefit.

d) The death benefit a corporation uses to buy stock of a deceased shareholder is tax-free.