I have a client who has a C corporation- He did a split dollar life insurance collateral assignment- He assigned his whole life insurance to the C corp. The corp. pays the premiums and he personally pays the PS 58 costs. On the corporation books is the cost ( premiums paid) . If he decides to cash in the policy, he will have a taxable gain personally, because he stills owns the policy.He is now going out of business and I want to close out the corporation, what happens to the cost of the insurance on the books?
Thank you!