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The dividends were used to purchase additional paid-up insurance which was then used to pay premiums. My understanding is that the IRS position is that "Dividends used to purchase paid-up additional insurance or to pay premiums on the same policy are not taxable. This is because the dividend distribution and simultaneous premium payment, or purchase of paid-up additional insurance, for the same amount will cancel each other out."
‎February 16, 2023
3:51 PM