Tax Reform Act Of 1986
What Does Tax Reform Act Of 1986 Mean?
The Tax Reform Act of 1986, enacted during the Reagan administration, brought significant changes to the U.S. tax system, particularly regarding income taxation. In the context of insurance, the act also introduced various adjustments to insurance-related taxation. It fundamentally reshaped the American tax landscape, affecting areas such as capital gains taxes and revising both the top and bottom tax rates.
Insuranceopedia Explains Tax Reform Act Of 1986
The Tax Reform Act of 1986 eliminated the income tax exclusion for installment payments on life insurance proceeds and introduced several other significant changes to insurance taxation. For instance, it repealed income tax deductions for interest on loans tied to certain life insurance contracts. Additionally, the act repealed deductions for contributions to protection against loss accounts of mutual property and casualty insurance companies. In essence, the act redefined how insurance taxation is applied and established a precedent for future legislation in this area.
