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Which insurance arrangement, which involved insurance of a loss that had previously occurred, similarly was found not to be insurance for federal income tax purposes?
Suggested Answer: D
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36 comments · newest first
LY
Lynna
11 months ago
I’m not convinced, seems like it should count as insurance.
CA
Carline
11 months ago
Surprised to learn retroactive isn't treated as insurance!
RE
Renay
12 months ago
Wait, I thought tax reserves were the answer?
AM
Amber
12 months ago
Totally agree, retroactive is not considered insurance.
VA
Van
12 months ago
It's B, retroactive insurance.
TR
Tran
1 year ago
I recall that retroactive insurance arrangements are tricky, but I’m not confident. Maybe it’s worth considering A or C too, just in case.
DE
Dell
1 year ago
I’m leaning towards B as well, but I’m a bit confused about the definitions. I wish I had reviewed those practice questions more thoroughly.
SH
Sherman
1 year ago
I'm not entirely sure, but I feel like it could also be D, Tax reserves. We went over some similar questions, and I remember something about reserves not being considered insurance.
EL
Elvis
1 year ago
I think the answer might be B, retroactive, because I remember it being discussed in class as not qualifying as insurance for tax purposes.
ST
Stacey
1 year ago
I'm a little confused by this question. I'm not sure I fully understand the concept of inactive classifications and why they would still show up in reports. I'll need to think this through carefully.
VI
Vincent
1 year ago
This looks like a tricky one. I'll need to think it through carefully.
AD
Adelina
1 year ago
Tax reserves? Now that's a new one. Is the IRS just making up insurance terms now? I'm sticking with B) retroactive, it's the only one that makes any sense.
NA
Naomi
1 year ago
Yeah, tax reserves are important for insurance companies to ensure they can cover future claims. Retroactive insurance does make the most sense in this context.
HE
Helaine
1 year ago
Yeah, I agree. Tax reserves and retroactive both seem like valid options in this case.
VI
Viola
1 year ago
I think retroactive makes sense too, it's like covering a loss that already happened.
RY
Ryan
1 year ago
I think you're right, retroactive insurance is when coverage is provided for a loss that has already occurred.
PH
Phillip
1 year ago
Tax reserves are actually a common term in insurance, it's used to cover future claims.
ED
Edna
1 year ago
Tax reserves are actually a common term in insurance, it's used to set aside funds for potential future claims.
VE
Velda
1 year ago
Annual statement, really? That's just basic accounting, not insurance. Gotta be B) retroactive, even if it sounds a bit sketchy.
BR
Brandee
1 year ago
I'm going with retroactive too, it just fits the description better.
SA
Samira
1 year ago
It does sound a bit sketchy, but I think retroactive makes the most sense.
AR
Art
1 year ago
Yeah, retroactive seems like the best option here.
RO
Rolf
1 year ago
I agree, annual statement doesn't sound like insurance at all.
CL
Cletus
1 year ago
Exactly, as long as it meets the criteria, it's considered insurance.
KA
Kanisha
1 year ago
True, it's all about how the arrangement is structured.
HA
Han
1 year ago
But it's still considered insurance for federal income tax purposes.
CH
Chauncey
1 year ago
I agree, retroactive insurance does sound a bit sketchy.
MA
Matthew
1 year ago
Hmm, this one's tricky. I'm gonna go with B) retroactive, seems like the only option that fits the description. Though I gotta say, the IRS must have a sense of humor to call that 'insurance'.
GE
Gerri
1 year ago
I'm not sure, but I think D) Tax reserves could also be a possible answer because it involves setting aside funds for potential future losses.
MA
Marica
1 year ago
I agree with Sherly, retroactive insurance involves covering losses that have already happened.
SH
Sherly
2 years ago
I think the answer is B) retroactive.
LY
Lynna
2 years ago
Whoa, retroactive insurance? That's like trying to insure your house after it's already burned down. Pretty sure that's not how it works, am I right?
OL
Olene
1 year ago
D) Tax reserves
MA
Marya
1 year ago
C) reserved
JA
Jackie
1 year ago
B) retroactive
GE
Geoffrey
1 year ago
A) annual statement