D is corrent. Group-term life insurance premiums paid by an employer for policies on the lives of its employees, with the employees’ dependents as beneficiaries are always deductible by the employer. Life insurance premiums on the life of a corporate officer are nondeductible when the corporation is the beneficiary. The premiums are nondeductible because the proceeds paid to the corporation upon the death of the officer will be nontaxable. Therefore, deductible life insurance premiums total $10,000. A is incorrect. The premium on the president’s life is not deductible because Moss is the beneficiary. B is incorrect. The premium for employees’ lives is deductible. C is incorrect. The premium is not deductible because Moss is the beneficiary.
