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DETAILED RESEARCH · EVIDENCE & LIMITS INCLUDED

Federal life-insurance borrowing and modified-endowment tax treatment

R036 · pass-01Captured 2026-10-2814 tables · 113 claim records · 24 source recordsScoped coordinator review completed

Read the evidence with its boundaries. These are saved research components, including revisions. A scoped coordinator review checks selected evidence; it does not certify every claim, a complete jurisdiction, current law or individual applicability. Dates and access limits remain attached to the records.

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R036 PASS-01 — A036 life-insurance-loan component

The controlling distinction is conditional. Section 72(e)(5)(C) generally preserves the special treatment of nonannuity amounts under qualifying life-insurance contracts, including turning off §72(e)(4)(A)’s loan-and-pledge deeming rule. Section 72(e)(10) turns that rule back on for a contract meeting the actual modified-endowment-contract definition in §7702A, and extends it to any person. Neither provision establishes that every contract called “permanent insurance,” every loan, or every outstanding balance has the same treatment. Complete surrender, benefit reductions, contract qualification, issue and change dates, prior distributions, and investment in the contract require separate analysis. Claims C002–C005, C035–C070 below provide the operative conditions. uscode.house.gov+1

1. Research record, authority status, and source register

Access: October 27, 2026, America/Los_Angeles. The session clock was checked at October 28, 2026, 01:39:11 UTC, corresponding to October 27, 2026, 18:39:11 in Los Angeles. The subsequent public-source reads occurred during that same Los Angeles date.

Jurisdiction: United States federal income tax throughout. References in federal statutes to applicable insurance law, state filings, or insurance standards are predicates; they do not establish compliance with any particular nonfederal law.

Currentness limit: The retrieved OLRC pages carry the individual currency statements recorded below. OLRC’s general currency page and the inspected 2026 classification table extended through Public Law 119-134, October 20, 2026. The inspected Title 26 classification entries did not identify a 2026 amendment to §§72, 264, 7702, or 7702A. This is a targeted compilation-and-classification check, not a complete session-law, regulatory-history, or judicial-status audit through the access date. US Code+1

Reference convention: In the remaining tables, S001 means R036-P1-S001, and C001 means R036-P1-C001. Those references resolve to the source and atomic-claim rows below. HTML sources have no printed-page or PDF-index coordinate. PDF page indexes are expressly zero-based.

Source table

Source ID Issuer, instrument, and complete literal HTTPS URL Version, legal status, and effectiveness Actual read bounds, precise pinpoints, and limits
R036-P1-S001 Congress; OLRC, 26 U.S.C. §72, Annuities; certain proceeds of endowment and life insurance contracts. https://uscode.house.gov/us/usc/119-124/t26/s72/ Retrieved text through P.L. 119-124, October 15, 2026. Statute as amended; applicable historical and transition provisions must be selected separately. Read complete (a)–(c), (e)(1)–(12), (f), (g), (h), (j), (l), (m)(7), (q), (u), and (v); selected (p)(1), (p)(5), and (s)(6)(B) for boundaries only. Read material amendment/effective-date notes concerning 1982, 1984, 1986, 1988–1989, 1996, 2006, 2010, and the relevant 2022 annuity amendment. Not a whole-§72 or whole-notes read. uscode.house.gov+2
R036-P1-S002 Congress; OLRC, 26 U.S.C. §7702A, Modified endowment contract defined. https://uscode.house.gov/us/usc/119-121/t26/s7702A/ Retrieved text through P.L. 119-121, October 9, 2026. Added by P.L. 100-647, §5012(c), November 10, 1988; substantive applicability generally begins with contracts entered into on or after June 21, 1988, subject to the reproduced transitions. Whole section (a)–(e), source credit, amendments, effective-date notes, and 2002 construction note read. Particularly §§7702A(a), (c)(2)–(6), (d), (e), and P.L. 100-647 §5012(e), as amended. uscode.house.gov
R036-P1-S003 Congress; OLRC, 26 U.S.C. §7702, Life insurance contract defined. https://uscode.house.gov/us/usc/119-124/t26/s7702/ Retrieved text through P.L. 119-124, October 15, 2026. Added July 18, 1984. The 2020 interest-assumption amendments apply to contracts issued after December 31, 2020. Other applicability rules are detailed below. Whole section (a)–(k), source credit, amendments, and displayed notes read. Material pinpoints: (b)–(f) qualification and measurements; (f)(7) benefit-reduction recapture; (g) failure; (i)–(j) special categories; P.L. 98-369 §221(d), P.L. 116-260 div. EE §205(e). uscode.house.gov+1
R036-P1-S004 Congress; OLRC, 26 U.S.C. §264, Certain amounts paid in connection with insurance contracts. https://uscode.house.gov/us/usc/119-134/t26/s264/ Retrieved text through P.L. 119-134, October 20, 2026. Current statutory body includes separate purchase-date rules and historical transition provisions. Whole section (a)–(f), source credit, amendments, and displayed notes read. §§264(a)(2)–(4), (c)–(f), and P.L. 104-191 §501(c)–(d) are material. Full business-deduction application remains excluded. uscode.house.gov
R036-P1-S005 Congress; OLRC, 26 U.S.C. §163, Interest. https://uscode.house.gov/us/usc/119-134/t26/s163/ Retrieved text through P.L. 119-134, October 20, 2026. Selected (a), (h)(1), and (h)(2) read for the separate deduction gate. Not a complete §163, investment-interest, business-interest, residence-interest, or other personal-interest-exception analysis. uscode.house.gov
R036-P1-S006 Congress; OLRC, 26 U.S.C. §101, Certain death benefits. https://uscode.house.gov/us/usc/119-134/t26/s101/ Retrieved text through P.L. 119-134, October 20, 2026. Read (a)–(f), with (f)’s concluding clauses separately completed. Used (a), (c), and (d) only as death-benefit boundaries; read (f) completely for pre-1985 flexible-premium predicates. Read P.L. 105-34 §1084(d) note concerning post-June 8, 1997 contracts and material changes. Not a complete death-benefit or employer-owned-insurance analysis. uscode.house.gov+2
R036-P1-S007 Congress; OLRC, 26 U.S.C. §1035, Certain exchanges of insurance policies. https://uscode.house.gov/us/usc/119-134/t26/s1035/ Retrieved text through P.L. 119-134, October 20, 2026. Long-term-care exchange amendments apply to exchanges after December 31, 2009. Whole (a)–(d), source/amendment/effective-date notes read. Foreign-person regulatory limitation identified but not developed. uscode.house.gov
R036-P1-S008 Congress; OLRC, 26 U.S.C. §1031, Exchange of real property held for productive use or investment, incorporated provisions. https://uscode.house.gov/us/usc/119-134/t26/s1031/ Retrieved text through P.L. 119-134, October 20, 2026. Read complete (b)–(d) because §1035(d) incorporates them. No real-estate exchange timing rules applied. Not a whole-section/history read. uscode.house.gov
R036-P1-S009 Congress; OLRC, 26 U.S.C. §357, Assumption of liability, incorporated definition. https://uscode.house.gov/us/usc/119-134/t26/s357/ Retrieved text through P.L. 119-134, October 20, 2026. Read complete (d)(1)–(3) for the liability-assumption definition incorporated by §1031(d). Corporate-transfer treatment and complete historical applicability not investigated. uscode.house.gov
R036-P1-S010 Congress; OLRC, 26 U.S.C. §817, Treatment of variable contracts. https://uscode.house.gov/us/usc/119-134/t26/s817/ Retrieved text through P.L. 119-134, October 20, 2026. Read complete (d) and (h) for variable-contract and diversification boundaries. Treas. Reg. §1.817-5 and underlying asset qualification were not comprehensively investigated. uscode.house.gov
R036-P1-S011 Congress; OLRC, 26 U.S.C. §7702B, Treatment of qualified long-term care insurance. https://uscode.house.gov/us/usc/119-134/t26/s7702B/ Retrieved text through P.L. 119-134, October 20, 2026. Includes 1996 enactment and 2006 coordination notes. Read (b), (c), (e), (g) and material displayed notes, including P.L. 104-191 §321(f)(4). No medical-status determination, state-law qualification investigation, or complete reading of incorporated insurance model standards. uscode.house.gov+1
R036-P1-S012 Treasury; eCFR, Treas. Reg. §1.72-2, Applicability of section 72. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR807fc2326e73cb3/section-1.72-2 Codified final regulation; retrieved eCFR status through October 22, 2026. Source history includes T.D. 6500, November 26, 1960; T.D. 6497, October 20, 1960; T.D. 6885, June 2, 1966. Read (a)(1)–(2), (b)(1)–(3) and source note. Used for annuity/nonannuity boundary, subject to later statutes. Original Treasury-decision preambles and all historical effectiveness provisions not read. ecfr.gov+1
R036-P1-S013 Treasury; eCFR, Treas. Reg. §1.72-11, Amounts not received as annuity payments. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR807fc2326e73cb3/section-1.72-11 Codified final regulation; retrieved status through October 16, 2026. Source history includes T.D. 6500, November 26, 1960; T.D. 6885, June 2, 1966; T.D. 8115, December 19, 1986. Whole (a)–(h) and source note read. Material surrender provision (d)(1)–(2). Historical caps and obsolete cross-references were not treated as overriding amended §72. Full original-decision effectiveness audit not performed. ecfr.gov+2
R036-P1-S014 Treasury, Treas. Reg. §1.7702-2, Attained age of the insured under a life insurance contract; T.D. 9287. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRc1c6d714d9aed32/section-1.7702-2. Same instrument in https://www.irs.gov/irb/2006-46_IRB. Final T.D. 9287, September 13, 2006, 71 FR 53970; effective that day, with distinct contract applicability under paragraph (f). First retrieved eCFR snapshot through October 13, 2026. IRB publication November 13, 2006. Whole regulation (a)–(f), including examples and applicability, read. Selected T.D. preamble/version material read in IRB, not the whole bulletin. These formats are one instrument, not independent corroboration. ecfr.gov+1
R036-P1-S015 Treasury; eCFR, Treas. Reg. §1.1035-1, Certain exchanges of insurance policies. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRbf83dcc4bd89326/section-1.1035-1 Codified final regulation; retrieved status through October 23, 2026. Original issuance/effective date not verified in the retrieved section. Whole section text read. Same-insured/same-obligee and money/other-property provisions used. Its older exchange-category wording was read with current §1035, including later long-term-care amendments. ecfr.gov
R036-P1-S016 IRS, Rev. Rul. 2009-13. https://www.irs.gov/pub/irs-drop/rr-09-13.pdf. Published in https://www.irs.gov/irb/2009-21_IRB. Published IRS interpretation, 2009-21 I.R.B. 1029, May 26, 2009. Modified by S017; not relied on as an unmodified instrument. All 12 PDF pages read as parsed text, indexes 0–11. Surrender analysis: printed pp. 3–5 / indexes 2–4; holding 1: printed p. 11 / index 10. Its surrender situation has no outstanding loan or prior withdrawals. No PDF-pixel inspection claimed; no case opinions investigated. irs.gov+1
R036-P1-S017 IRS, Rev. Rul. 2020-05. https://www.irs.gov/pub/irs-drop/rr-20-05.pdf. Published in https://www.irs.gov/irb/2020-09_IRB. Published IRS interpretation, 2020-9 I.R.B. 454, February 24, 2020. Its stated effective date is transactions on or after August 26, 2009. All six PDF pages read as parsed text, indexes 0–5. Material modification discussion printed pp. 4–5 / indexes 3–4; effect on other documents and effective date printed p. 6 / index 5. Used to establish S016’s modified status, not to regenerate an asset-sale component. No pixel inspection. irs.gov+1
R036-P1-S018 IRS, Publication 525 (2025), Taxable and Nontaxable Income. https://www.irs.gov/publications/p525 Public explanatory publication, 2025 version; exact original issuance/revision day not established. It is not a statute or final regulation. Selected “Life Insurance Proceeds,” especially complete “Surrender of policy for cash” paragraph, read. Not the whole publication. Its simplified treatment of unrepaid loans is qualified below; it does not establish all lapse scenarios. Internal Revenue Service
R036-P1-S019 IRS, Instructions for Forms 1099-R and 5498 (2026). https://www.irs.gov/instructions/i1099r Public reporting instructions, 2026 version; exact issuance/revision day not established. A tax-year heading is not a substantive effective-date finding. Read material body: life-insurance/annuity/endowment reporting; §1035 exchanges; boxes 1, 2a, 2b, 4, 5, 7a; relevant distribution-code entries and notes. Not whole instructions; no blank-form PDF or pixels inspected; no form completed. The §72(v) periodic-payment coding issue is explicitly unresolved below. Internal Revenue Service+3
R036-P1-S020 Congress; OLRC, 26 U.S.C. §31, Tax withheld on wages, incorporated credit rule. https://uscode.house.gov/us/usc/119-134/t26/s31/ Retrieved text through P.L. 119-134, October 20, 2026. Complete (a)(1)–(2) read for crediting chapter 24 withholding. Not a return or tax-payment calculation. uscode.house.gov
R036-P1-S021 Congress; OLRC, 26 U.S.C. §6047, Returns relating to certain trusts and annuity plans. https://uscode.house.gov/us/usc/119-134/t26/s6047/ Retrieved text through P.L. 119-134, October 20, 2026. Selected complete (d)(1)–(2), (g), (h) and relevant source/amendment notes read. §6047(d)’s issuer reporting rule and §6050Y coordination identified; complete reporting obligations excluded. uscode.house.gov
R036-P1-S022 Congress; OLRC, 26 U.S.C. §3405, Special rules for pensions, annuities, and certain other deferred income. https://uscode.house.gov/us/usc/119-134/t26/s3405/ Retrieved text through P.L. 119-134, October 20, 2026. Read (a)–(e)(13). Relied on (d), (e)(1), (e)(6), and (e)(8) to distinguish reporting/withholding classification, payor duties, cash limitations, and substantive income treatment. No full withholding determination or rate calculation. uscode.house.gov
R036-P1-S023 OLRC, Currency and Updating; Classification Tables; 2026 classification table. https://uscode.house.gov/currency.html; https://uscode.house.gov/classification/tables.html; https://uscode.house.gov/classification/tbl119cd_2nd.html Publisher currency and classification metadata; not substantive tax authority. Currency and table-explanation pages read; 2026 table header and entire Title 26 block read. Not the entire classification table or a full session-law audit. US Code+2
R036-P1-S024 Congress; OLRC, 26 U.S.C. §807 notes, P.L. 115-97 §13517(c). https://uscode.house.gov/us/usc/119-124/t26/s807/ Retrieved text through P.L. 119-124, October 15, 2026. Enactment December 22, 2017; specified amendments apply to taxable years beginning after December 31, 2017. Read complete §13517(c)(1)–(3) effective-date, transition, and transition-relief note. Not whole §807. The reserve transition was not imported into policyholder loan taxation. uscode.house.gov

2. Substantive findings and atomic claim register

The following tables are the substantive findings. Each row states a conditional proposition, its exact authority, and its application limit. No row classifies an actual contract or establishes an actual amount.

A. Contract qualification and distinct measurements

Claim ID Supported proposition and consequential conditions Exact authority and scope
R036-P1-C001 The retrieved statutory versions and targeted classification check support the version statements in the source register. They do not establish that every later enactment, judicial development, or original regulatory effective-date instrument was audited. S001–S024, their stated currency/read bounds; S023, currency page and 2026 Title 26 classification block.
R036-P1-C002 Under the generally applicable §7702 definition, a life-insurance contract must be life insurance under applicable law and satisfy either the cash-value-accumulation test or both the guideline-premium requirements and cash-value corridor. A product label does not establish these elements. The church-plan exception is separately addressed in C027. S003, §7702(a)(1)–(2), (j). uscode.house.gov
R036-P1-C003 For §7702, “cash surrender value” means cash value determined without regard to a surrender charge, policy loan, or reasonable termination dividends. Thus this statutory measurement can differ from cash deliverable after charges and debt offsets. S003, §7702(f)(2)(A). This is a section-specific definition, not a universal definition for every tax provision or contract.
R036-P1-C004 For §7702, “net surrender value” takes surrender charges into account but disregards policy loans. It is therefore distinct from both C003’s measure and net cash actually paid. S003, §7702(f)(2)(B).
R036-P1-C005 For §72(e), investment in the contract on a date is aggregate premiums or other consideration paid before that date, reduced by prior amounts received to the extent excludable under the subtitle or prior income-tax laws. The specific adjustments in C058, C068, and C072 must also be considered. “Basis” is not assumed to equal premiums, account value, or loan balance. S001, §72(e)(6), (e)(4)(A), (e)(11), (g). uscode.house.gov
R036-P1-C006 The cash-value-accumulation test requires contract terms preventing cash surrender value at any time from exceeding the net single premium needed then to fund future benefits. Computation uses the greater of the applicable accumulation-test minimum rate or guaranteed issue rates, the specified mortality/additional-benefit charge rules, and the specified current/future-benefit assumptions. S003, §7702(b)(1)–(2), incorporating (c)(3)(B)(i)–(ii), (e)(1)(A), (D).
R036-P1-C007 For contracts issued after December 31, 2020, the accumulation-test minimum is the lesser of 4% and the statutory insurance interest rate at issue; the guideline-premium minimum is that accumulation minimum plus two percentage points. The insurance interest rate is the lesser of the specified valuation and federal-rate measures for the adjustment year, or latest adjustment year. The federal-rate measure averages the prescribed 60 monthly mid-term rates, annually compounded, and rounds to the nearest whole percentage point. The statutory 2% transition begins January 1, 2021 and ends before the first adjustment year after 2021; it is not proof of a universal 2026 rate. S003, §7702(b)(3), (c)(3)(E), (f)(11)(A)–(E); P.L. 116-260 div. EE §205(e). No rate series or actuarial calculation performed.
R036-P1-C008 Under the guideline-premium route, cumulative premiums paid cannot exceed the guideline-premium limitation at any time. That limitation is the greater of the guideline single premium or the sum of guideline level premiums to that date. S003, §7702(c)(1)–(2).
R036-P1-C009 The guideline single premium is determined at issue, except for required adjustments, using the statutory mortality, reasonably expected charge, and interest assumptions. An unspecified charge is zero for this computation; industry experience substitutes for insufficient company experience only to the extent provided by regulations. Guideline level premiums run over a period not ending before insured age 95, using the accumulation minimum instead of the higher guideline minimum. Prevailing tables and the statutory three-year table-transition option are separately relevant. S003, §7702(c)(3)–(4), (f)(10). Current mortality clause uses the statutory alternatives in (c)(3)(B)(i); no actual table or charge assumption established.
R036-P1-C010 Under the corridor route, the death benefit must at all times be at least the applicable percentage of cash surrender value. The percentage uses attained age at the beginning of the contract year and decreases ratably for each full year within the statutory bands reproduced immediately below. S003, §7702(d)(1)–(2); age rules in S014. These are qualification ratios, not income-tax rates or borrowing limits.
R036-P1-C011 Except for the corridor calculation, §7702’s general assumptions deem death and qualified additional benefits nonincreasing, maturity between insured ages 95 and 100, death benefits continuing to that deemed maturity, and endowment benefits—including maturity cash surrender value—not exceeding the least death benefit. Specified death-benefit increases may be recognized to preserve the excess over cash surrender value; the cash-value-accumulation alternative requires the stated net-level-reserve test and premium period not ending before age 95. S003, §7702(e)(1), (e)(2)(A)–(B).
R036-P1-C012 A separate burial/funeral qualification rule permits specified increases for cash-value-accumulation testing only if initial death benefit is at most $5,000, maximum death benefit at most $25,000, annual fixed predetermined increase is at most 10% of initial benefit or 8% of preceding-year benefit, and the purchase is for the specified burial/prearranged-funeral expenses. Initial death benefit aggregates all contracts issued to the same owner. This rule is excluded from the MEC seven-pay computational cross-reference. S003, §7702(e)(2)(C); S002, §7702A(c)(1)(B). The burial-increase amendment applies to contracts entered into after October 22, 1986, per S003’s note.
R036-P1-C013 §7702 “premiums paid” is its own measure: premiums less specified nontaxable §72(e) amounts, specified excess-premium distributions, and other amounts prescribed by regulations. A premium portion returned with interest to comply with the guideline requirement within 60 days after the contract year reduces premiums for that year, excluding the interest; the returned interest is income. S003, §7702(f)(1)(A)–(C). This is not automatically the same measure as §72 investment or §7702A “amount paid.”
R036-P1-C014 A premium otherwise exceeding the guideline limit is disregarded for that limit only to the extent necessary to prevent termination through the end of the contract year, and only if the contract has no cash surrender value at the end of the extension period. S003, §7702(f)(6). This is not a general excess-premium permission or loan exclusion.
R036-P1-C015 An unreflected change in benefits or other terms requires proper adjustments in future §7702 determinations. A §7702 adjustment and a §7702A material change are related inquiries governed by different text. S003, §7702(f)(7)(A); compare S002, §7702A(c)(3).
R036-P1-C016 If an unreflected change reduces benefits during the 15-year period beginning on issue, and a cash distribution results, §72 applies without §72(e)(5) up to the applicable recapture ceiling. Thus a qualifying contract outside the MEC rules can have a distribution for which the ordinary §72(e)(5) treatment is displaced. S003, §7702(f)(7)(B). The ceiling is not itself a declaration that its entire amount is taxable. uscode.house.gov
R036-P1-C017 For a cash-value-accumulation contract and a reduction within the first five years, the recapture ceiling is the excess of cash surrender value immediately before reduction over the net single premium immediately afterward. S003, §7702(f)(7)(C)(i).
R036-P1-C018 For a guideline-premium contract and a reduction within the first five years, the ceiling is the greater of: premiums before reduction exceeding the adjusted guideline limit; or cash surrender value before reduction exceeding the post-reduction cash-value corridor. S003, §7702(f)(7)(C)(ii)(I)–(II).
R036-P1-C019 For a reduction after the first five years but within the first fifteen, the ceiling is the excess of pre-reduction cash surrender value over the post-reduction corridor, whether or not the contract otherwise uses that corridor test. S003, §7702(f)(7)(D).
R036-P1-C020 The benefit-reduction rule also addresses anticipatory distributions. A distribution reducing cash surrender value and made within two years before a benefit reduction is statutorily treated as anticipatory; the ceiling provisions require appropriate adjustments. S003, §7702(f)(7)(E), including its regulatory direction.
R036-P1-C021 Qualification failure is not automatically cured. The Secretary may waive failure only if the taxpayer establishes reasonable error and reasonable remedial steps to the Secretary’s satisfaction. S003, §7702(f)(8). No waiver, closing agreement, or request is assumed or pursued.
R036-P1-C022 Variable contracts require additional classification checks. §7702 testing occurs whenever death benefits change and at least once each 12-month period. §817 defines variable contracts and imposes a diversification condition, subject to its exceptions and regulatory rules. A “variable life” label alone does not establish qualification. S003, §7702(f)(9); S010, §817(d), (h). Detailed diversification application remains partial because §1.817-5 and actual investments are outside this completed reading.
R036-P1-C023 A contract that is life insurance under applicable law but fails §7702(a) can produce annual ordinary income under §7702(g). The statutory annual measure is the excess of the increase in net surrender value plus the cost of protection over premiums paid. Protection cost is the lesser of the specified regulatory uniform-premium measure, using five-year age brackets, or stated mortality charge. S003, §7702(g)(1)(A), (B), (D). No annual amount established.
R036-P1-C024 If such a contract ceases to qualify during a year, income on the contract for all prior taxable years is treated as received or accrued in the cessation year under the statutory catch-up rule. S003, §7702(g)(1)(C). This is a qualification-failure rule, not a universal lapse or loan-balance rule.
R036-P1-C025 For a state-law life contract failing §7702(a), only death proceeds exceeding net surrender value receive the specified deemed-life-insurance treatment under §7702(g)(2). The contract nevertheless remains an insurance contract for the Code under (g)(3). Failure does not automatically make it a MEC or an ordinary annuity. S003, §7702(g)(2)–(3). Full beneficiary treatment remains unestablished.
R036-P1-C026 Section 7702 extends its qualification/failure rules to applicable-law endowment contracts and separately defines qualifying endowment contracts for the Code. Section 72 also includes certain face-amount certificates issued after December 31, 1954 within its endowment-contract terminology. These provisions prevent classification solely from a product title. S003, §7702(h); S001, §72(l). The incorporated securities-law certificate definition was not needed to classify an actual instrument and was not independently developed.
R036-P1-C027 The applicable-law limb of §7702(a) is waived for the specified church-provided death-benefit arrangements for employees and beneficiaries, directly or through the specified organizations. The other federal qualification requirements are not thereby universally waived. S003, §7702(j)(1)–(3). No employment, church, or organizational facts supplied; application excluded.
R036-P1-C028 The printed §7702(i) qualified-20-pay rule requires at least 20 nondecreasing annual premiums and an existing plan filed before September 28, 1983, on file in the appropriate state. Its text substitutes 3% for 4% in §7702(b)(2). Because the 2020 amendment changed that subsection’s rate wording, a modern application of this legacy cross-reference is not resolved here. S003, §7702(i); P.L. 98-369 §221(d)(3); 2020 amendment notes. Annual rather than monthly excess-interest crediting does not itself defeat the specified pre-1983-plan predicate.
R036-P1-C029 Final §1.7702-2 governs attained age for specified §7702 tests: actual birthday age or a consistently used contract age within 12 months of actual age, changing annually. First-to-die contracts use the oldest insured; last-to-die contracts generally use the youngest, with the prescribed youngest-surviving rule when both cash-value and future-mortality terms change at death. It applies to contracts issued after December 31, 2008, or on/after October 1, 2007 using the specified 2001 tables; earlier use is permitted only under its consistency condition. S014, §1.7702-2(a)–(f). This actuarial insured-age rule does not establish the taxpayer-age exception under §72(v).
R036-P1-C030 Section 7702 generally applies to contracts issued after December 31, 1984, in taxable years ending afterward. It also reaches specified increasing-death-benefit contracts issued after June 30, 1984 with funding faster than ten-year level premiums, subject to C031–C032. For a master contract, the relevant issue date for an insured is first coverage. S003, P.L. 98-369 §221(d)(1), (2)(A), (5).
R036-P1-C031 The early-1984 application has three alternative exceptions: a contract meeting the specified §101(f) test; a nonflexible-premium contract meeting the modified §7702 test using 3% and the specified latest-maturity/20-year/age-95 assumption; or the specified periodically adjusted level-premium arrangement using at least 3%, with a comparable death-benefit adjustment allowed at the insured’s option. S003, P.L. 98-369 §221(d)(2)(B)(i)–(iii). These are historical predicates, not a blanket pre-1985 exemption.
R036-P1-C032 A further 1984 transition substitutes September 30, 1984 for June 30 when the contract meets the specified modified §7702 test, disregards the specified mortality charges and initial excess-interest guarantees in determining guaranteed rates, and never exceeds the prescribed net-single-premium value. That value uses 3%, the specified 1958 tables, and a level death benefit. A flexible-premium contract issued during 1984 that meets §7702 is treated as meeting §101(f). S003, P.L. 98-369 §221(d)(2)(C); §221(b)(3), as added in 1986.
R036-P1-C033 Section 101(f)’s pre-1985 flexible-premium category has its own predicates. It concerns premiums not fixed as to both timing and amount, excluding a state-law annuity portion other than a settlement option. Its death-payment condition requires either the guideline-limit/corridor route or the cash-value/net-single-premium route. Its corridor begins at 140% through age 40, decreases one percentage point per later year, and bottoms at 105%. Its guideline assumptions use guaranteed charges and the greater of 6% or guaranteed rates, with 4% for level premiums; its net-single-premium interest floor is 4%, or 3% for issuance before July 1, 1983. It has distinct maturity, benefit-change, qualified-additional-benefit, premium-refund-within-60-days, necessary-premium, and reasonable-error provisions. These historical tests cannot be replaced by a current product label. S006, §101(f)(1)–(3), read completely. Cash value disregards surrender charges and policy loans; net-single-premium mortality uses the specified guaranteed/all-state-table predicate; maturity and endowment assumptions are those in (2)(D), (3)(G). No actual death exclusion or actuarial determination made.
R036-P1-C034 The 2017 mortality/table amendments have an effective-date rule for taxable years beginning after December 31, 2017. The accompanying reserve transition and eight-year reserve adjustment concern the specified reserve provisions; they are not a policyholder loan-income spreading rule. S003, amendment/effectiveness notes; S024, P.L. 115-97 §13517(c)(1)–(3).

C010 — statutory corridor schedule

Insured attained-age band, beginning of contract year Applicable percentage, from → to
More than 0, not more than 40 250% → 250%
More than 40, not more than 45 250% → 215%
More than 45, not more than 50 215% → 185%
More than 50, not more than 55 185% → 150%
More than 55, not more than 60 150% → 130%
More than 60, not more than 65 130% → 120%
More than 65, not more than 70 120% → 115%
More than 70, not more than 75 115% → 105%
More than 75, not more than 90 105% → 105%
More than 90, not more than 95 105% → 100%

These are the statutory endpoints, with the ratable-full-year instruction in §7702(d)(2). No extension beyond the displayed bands or actual qualification calculation is inferred. uscode.house.gov

B. Modified endowment contract: definition, testing, changes, aggregation, and transitions

Claim ID Supported proposition and consequential conditions Exact authority and scope
R036-P1-C035 A modified endowment contract—MEC—must first meet §7702. It is a contract entered into on or after June 21, 1988 that fails the seven-pay test, or a qualifying contract received in exchange for such a MEC or a successor exchange contract. Failure of §7702 is not the MEC definition. S002, §7702A(a)(1)–(2). uscode.house.gov
R036-P1-C036 The seven-pay test fails if, at any time during the first seven contract years, accumulated amount paid exceeds the cumulative net level premiums that would have been paid by then for paid-up future benefits after seven level annual premiums. It is not a comparison only at year-end or only against actual premiums scheduled by the contract. S002, §7702A(b).
R036-P1-C037 Seven-pay premiums are determined at issue using §7702(b)(2) and (e), excluding the burial-increase rule in §7702(e)(2)(C). The first-contract-year death benefit is deemed to continue through maturity, disregarding scheduled reductions after the first seven years. S002, §7702A(c)(1). Applicable historical interest assumptions still require the issue-date analysis.
R036-P1-C038 A benefit reduction within the first seven contract years requires testing as though originally issued at the reduced level. A reduction attributable to nonpayment of premiums is disregarded for this rule if benefits are reinstated within 90 days after reduction. S002, §7702A(c)(2)(A)–(B). No reinstatement or deadline is established for an actual contract.
R036-P1-C039 An unreflected material change in benefits or other terms makes the contract a new contract, for §7702A, on the day the change takes effect. Seven-pay testing must make appropriate adjustments for cash surrender value under the contract. S002, §7702A(c)(3)(A)(i)–(ii).
R036-P1-C040 Material changes include death-benefit increases and increases/additions of qualified additional benefits. The definition excludes increases attributable to premiums necessary to fund the lowest death-benefit/additional-benefit level payable in the first seven years, after the specified §7702(e)(2)(A)–(B) increases, and interest, earnings, or policyholder dividends on those necessary premiums. S002, §7702A(c)(3)(B)(i).
R036-P1-C041 A cost-of-living increase is excluded from material-change treatment only to the extent provided in regulations, using an established broad-based index and ratable funding over the remaining required-premium period. The statutory regulatory authorization alone does not establish a particular increase qualifies. S002, §7702A(c)(3)(B)(ii). No applicable regulatory allowance was assumed.
R036-P1-C042 If initial death benefit is at most $10,000 and at least seven nondecreasing annual premium payments are required, each statutory seven-pay level premium is increased by $75. For this test, the contract and all contracts previously issued by the same company to the same policyholder are one contract. S002, §7702A(c)(4). This aggregation is not limited to one calendar year.
R036-P1-C043 Expenses attributable solely to collection of premiums more frequently than annually can enter seven-pay computation only under rules prescribed by regulation. The statute does not itself provide an unrestricted expense adjustment. S002, §7702A(c)(5).
R036-P1-C044 For the specified second-death or simultaneous-death contract, reduction below the lowest death benefit provided during the first seven contract years requires testing as originally issued at the reduced benefit. The reduction clause itself is not limited to reductions occurring during those seven years. This amendment applies to contracts entered into on or after September 14, 1989. S002, §7702A(c)(6); P.L. 101-239 §7647(b).
R036-P1-C045 Failure affects distributions in the contract year of failure and later contract years, plus anticipatory distributions under the statutory/regulatory rule. A distribution within two years before failure is deemed anticipatory. Consequently a later failure can affect an earlier distribution; the text does not simply tax every outstanding balance upon reclassification. S002, §7702A(d)(1)–(2), concluding sentence.
R036-P1-C046 For seven-pay testing, “amount paid” means premiums less §72(e) amounts that are not included in gross income, determined without the loan/pledge deeming rule in §72(e)(4)(A). This differs from both §72 investment and §7702 premiums paid. S002, §7702A(e)(1)(A).
R036-P1-C047 A premium portion returned with interest to comply with the seven-pay test within 60 days after the end of the contract year reduces that year’s premiums, excluding the interest. The returned interest is included in the recipient’s gross income notwithstanding §72(e). S002, §7702A(e)(1)(B)–(C). No actual correction or timely refund established.
R036-P1-C048 A contract year is the 12-month period beginning with the first month for which the contract is in effect, and corresponding successive periods. It is not necessarily a calendar year. Other §7702A terms generally take their §7702 meanings. S002, §7702A(e)(2)–(3).
R036-P1-C049 The 1988 MEC amendments generally apply to contracts entered into on or after June 21, 1988. The successive-exchange clarification was made effective as part of the 1988 amendments. The 2002 enactment repealed the intervening “old contract” wording in the cash-value adjustment clause as though that amendment had not occurred. S002, P.L. 100-647 §5012(e)(1); P.L. 106-554 §318(a)(3); P.L. 107-147 §416(f).
R036-P1-C050 For the historical issue-date transition, a death-benefit increase of more than $150,000 over the benefit in effect on October 20, 1988 invokes the material-change rules in determining post-June 20, 1988 status. This particular trigger does not apply if, as of June 21, 1988, at least seven level annual premiums were required and at least seven are actually made. S002, P.L. 100-647 §5012(e)(2). The exception is not automatically an exception to every other material-change rule.
R036-P1-C051 A pre-June 21, 1988 contract is treated as later-entered if a death benefit or qualified additional benefit is increased/added on or after that date without a preexisting unilateral right to obtain it without additional insurability evidence; or if it is converted after June 20, 1988 from term to nonterm coverage, regardless of a prior conversion right. S002, P.L. 100-647 §5012(e)(3)(A)–(B).
R036-P1-C052 A narrow historical exchange exception concerned MECs entered into after June 20 and before November 10, 1988, requiring at least seven level annual premiums, exchanged within three months after enactment for seven-pay-compliant life insurance, with an election to recognize gain notwithstanding §1035. It does not establish a presently available general MEC “reset.” S002, P.L. 100-647 §5012(e)(4). No calendar deadline calculated.

C. Receipt, borrowing, distributions, investment recovery, and later events

Claim ID Supported proposition and consequential conditions Exact authority and scope
R036-P1-C053 Section 72(e) addresses an amount received under an annuity, endowment, or life-insurance contract that is not received as an annuity, and only when another provision of the subtitle does not apply to that amount. A dividend or similar distribution is treated as nonannuity receipt. S001, §72(e)(1)(A)–(B). Classification comes before ordering.
R036-P1-C054 For nonannuity life/endowment amounts within §72(e)(5)(C), absent its MEC/regulatory exceptions and other statutory overrides, §72(e)(2)(B)’s income-first allocation and §72(e)(4)(A)’s loan/pledge deeming do not apply. If the post-annuity-starting-date rule does not apply, inclusion is only to the extent the amount exceeds investment in the contract. Thus a genuine policy borrowing is not made a distribution merely by the switched-off deeming rule. S001, §72(e)(5)(A), (C); qualifications C016–C020, C055, C068, C074. This is not a finding that an actual advance is a genuine loan. uscode.house.gov
R036-P1-C055 For a MEC, §72(e)(10) overrides the life/endowment exception, applies §72(e)(2)(B) and (4)(A), and substitutes “any person” for “an individual” in the deeming rule. Taxable income still depends on the applicable allocation and exceptions; MEC status does not make every dollar of every loan taxable. S001, §72(e)(10)(A); S002, §7702A(d).
R036-P1-C056 In the pre-annuity-starting-date income-first framework, the amount is allocated to income up to the excess, if any, of cash value without surrender charge immediately before receipt over investment then. The balance is allocated to investment. The statute’s own §72 measurement must be used; §7702’s separate definition is not silently substituted. S001, §72(e)(2)(B), (3)(A)–(B). Aggregation under C070 may change the relevant combined measurement.
R036-P1-C057 Within that framework, direct or indirect receipt of an amount as a loan under the contract, or assignment, pledge, or agreement to assign/pledge a portion of contract value, causes that amount or portion to be treated as received as a nonannuity amount. The assigned/pledged portion is not automatically the face death benefit or the entire unassigned contract. S001, §72(e)(4)(A)(i)–(ii), with MEC substitution in (e)(10)(A)(ii). A collateral event can matter without delivery of new cash by the insurer.
R036-P1-C058 The loan/pledge deeming sentence does not itself apply in determining investment in the contract, except that investment increases by the amount actually included in gross income because of that deeming. Thus neither subtracting the entire deemed loan from investment nor adding the entire loan as a premium follows from this rule. S001, §72(e)(4)(A), final sentence. Actual repayments and later applications of debt require separate characterization; no automatic repayment adjustment is invented.
R036-P1-C059 A MEC assignment or pledge is excepted from §72(e)(4)(A) when it is solely to cover the burial/prearranged-funeral expenses referenced by §7702(e)(2)(C)(iii), and maximum death benefit is at most $25,000. The exception is for assignment/pledge; it is not an express exception for every loan. It does not import all the separate initial-benefit/increase limits of C012. S001, §72(e)(10)(B).
R036-P1-C060 Section 72(e)(5) also protects the specified pre-August 14, 1982 contract treatment, but investment allocable after August 13, 1982 is treated as from a later contract. Accordingly an annuity comparison cannot simply assume that all old and new investment has identical income-first or loan-deeming treatment. S001, §72(e)(5)(B); P.L. 97-248 §265(c). No retirement-plan renewal transition is imported.
R036-P1-C061 Section 72(e)(5)(E) separately covers amounts received on complete surrender, redemption, or maturity, and amounts received in full discharge of the contract obligation in the nature of a refund of consideration. It also switches off §72(e)(2)(A) for those amounts. Section 72(e)(10) overrides (5)(C), not the separate full-surrender text in (5)(E). S001, §72(e)(5)(A), (E), (10)(A); S013, §1.72-11(c)–(d). “Full discharge” here is not a blanket rule for cancellation of a borrower’s debt.
R036-P1-C062 Rev. Rul. 2009-13 applies §72(e)(5) to a qualifying life contract’s surrender, treats the excess over investment as ordinary income, and does not reduce surrender investment by cost-of-insurance charges in its stated situation. Its surrender facts include no policy loans or prior distributions, so it does not establish a universal indebted-lapse calculation. S016, Situation 1 analysis, printed pp. 3–5 / PDF indexes 2–4; holding 1, printed p. 11 / index 10.
R036-P1-C063 Rev. Rul. 2009-13 must be read with Rev. Rul. 2020-05’s modifications concerning the later statutory adjusted-basis rule. Using the original ruling as wholly unchanged would misstate its status. The separate sale analyses are not a foundation for this component. S017, printed pp. 4–6 / indexes 3–5, modifying S016; stated effective date transactions on/after August 26, 2009.
R036-P1-C064 Publication 525’s cash-surrender explanation subtracts unrepaid loans not previously included in income in its simplified cost description. This supports the need to reconcile debt and cash in a surrender computation. It does not authorize simultaneously adding the same debt to gross proceeds and subtracting it again from statutory investment, or reducing §72(e)(6) investment every time a non-MEC loan originates. S018, “Surrender of policy for cash,” read with S001, §72(e)(4)(A), (5)(E), (6). The anti-double-counting conclusion is an analytical reconciliation, not an additional statutory formula.
R036-P1-C065 The labels “lapse,” “termination,” “discharge,” and “write-off” do not by themselves identify a receipt or its measure. If an event constitutes a complete surrender or refund, C061 controls its ordering; if a MEC loan/pledge is deemed received, C055–C058 control. Whether a particular event applied value to debt, discharged a contractual obligation, or produced another legally relevant amount remains fact-dependent. S001, §72(e)(4), (5)(E), (6), (10); S018. Partial: the selected noncase authorities do not establish one exhaustive treatment for every zero-cash lapse, interest capitalization, or debt discharge.
R036-P1-C066 Cash originally advanced, an outstanding principal balance, accrued interest, newly capitalized interest, a new advance, repayment, and later contract settlement are distinct events or measurements. The read §72 provisions do not justify treating every unchanged balance as a new annual receipt or importing §72(p)’s plan-loan rules for interest, renewal, cure, or repayment. S001, §72(e)(4)(A), (6), (10); boundary (p)(1), (5). Treatment of a particular capitalization or refinancing remains unresolved without its legal character and pertinent published authority.
R036-P1-C067 A dividend retained by the insurer as a premium or other consideration is not included under §72(e)(2)(B)(i) to that extent. A cash dividend and a retained-premium dividend therefore require different facts and cannot automatically be treated as either a loan or newly paid outside cash. S001, §72(e)(1)(B), (4)(B), (6).
R036-P1-C068 A charge against annuity cash value or life-insurance cash surrender value for coverage under a qualified long-term-care contract that is part of or a rider on the contract is not included in income under §72(e)(11), notwithstanding the specified ordinary/MEC rules. It reduces investment, but not below zero. The 2006 provision generally applies to contracts issued after December 31, 1996, for taxable years beginning after December 31, 2009. S001, §72(e)(11); P.L. 109-280 §844(g)(1). No rider qualification assumed.
R036-P1-C069 Qualified long-term-care status requires the separate §7702B predicates, including qualified services, the specified Medicare coordination, guaranteed renewability, restrictions on cash/borrowing/assignment values, premium-refund treatment, and consumer-protection requirements. Section 7702B(e) separates the rider portion and denies a §213 deduction for the specified value-funded charge. Issuance of a qualified rider, or adding provisions needed to conform another long-term-care rider, is not a modification/material change for §§101(f), 7702, or 7702A under the enactment note. S011, §7702B(b), (c), (e), (g); P.L. 104-191 §321(f)(4). Incorporated qualification standards and actual eligibility remain unestablished.
R036-P1-C070 For §72(e) inclusion, all MECs issued by the same company to the same policyholder during a calendar year are one MEC; annuities have a corresponding aggregation rule. The rule excludes §72(e)(5)(D) contracts. Additional anti-abuse rules require regulations; “all related contracts everywhere” is not the text. For annuities, the 1988 subsection-(d) amendments apply to contracts entered into after October 21, 1988. S001, §72(e)(12)(A)–(B); S002, P.L. 100-647 §5012(e)(5); 1989 calendar-year amendment note.
R036-P1-C071 An individual’s transfer of an annuity without full and adequate consideration has a separate deemed-receipt rule for cash surrender value exceeding investment, with the §1041(a) exception and a transferee investment increase for the amount included. This is not automatically the rule for a collateral assignment of a life contract. S001, §72(e)(4)(C)(i)–(iii). Full gift/divorce analysis excluded.
R036-P1-C072 For a transfer for value whose transferee basis is not determined by reference to the transferor’s basis, §72(g) uses actual consideration plus subsequent transferee premiums/consideration, specified transferee prior receipts, and the transferee’s annuity starting date. “Transferee” includes its beneficiary or estate. A pledge alone does not establish all these transfer-for-value predicates. S001, §72(g)(1)–(3), concluding sentence.
R036-P1-C073 Amounts actually received as an annuity are governed by §72(a)–(c), including the investment/expected-return framework and annuity-starting-date definition, rather than automatically by nonannuity withdrawal ordering. Qualifying partial annuitization for ten years or more or one or more lives creates a separate portion, pro rata investment allocation, and separate starting date; the 2010 amendment applies to taxable years beginning after December 31, 2010. S001, §72(a)–(c), P.L. 111-240 §2113(b); S012, §1.72-2(b). Historical annuity-starting-date rules and actuarial tables are not calculated or certified here.
R036-P1-C074 A nonannuity amount received on or after the annuity starting date is generally included under §72(e)(2)(A), subject to the applicable statutory exceptions, including the full-refund/surrender rule in C061. The pre-start loan/ordering analysis cannot simply be copied to every post-start event. S001, §72(e)(2)(A), (5)(A), (5)(E).
R036-P1-C075 If a contract provides a full-discharge lump sum with an annuity option, the option is exercised within 60 days after the lump sum first becomes payable, and some or all would otherwise be included under §72(e)(1), §72(h) prevents inclusion merely when that lump sum first becomes payable. S001, §72(h)(1)–(3). No exercise or deadline determined.
R036-P1-C076 Interest payments on an amount held under an agreement to pay interest are income notwithstanding other §72 provisions. That recipient interest is distinct from interest charged on a policy borrowing. S001, §72(j).
R036-P1-C077 Qualified-plan/IRA contracts have expressly separate §72(e)(5)(D)/(8) treatment. Section 72(p)(5) treats a loan, assignment, or pledge of a contract purchased under a qualified employer plan as a plan loan. These boundaries prevent importing the independent-policy analysis into a retirement arrangement or importing retirement-plan loan limits into this component. S001, §72(e)(5)(D), (8), (p)(1), (5). The separate retirement-plan-loan report was not used or regenerated.

D. Additional tax and annuity boundaries

Claim ID Supported proposition and consequential conditions Exact authority and scope
R036-P1-C078 If a taxpayer receives an amount under a MEC, §72(v)(1) increases tax for the receipt year by 10% of the portion included in gross income, subject to its exceptions. The base is not automatically gross cash, original borrowing, death benefit, or outstanding principal. S001, §72(v)(1), read with (e)(4)(A), (10) for deemed receipts. uscode.house.gov
R036-P1-C079 The age exception applies to a distribution made on or after the date the taxpayer attains 59½. The insured’s age, contract age, or another role’s age does not establish this predicate. S001, §72(v)(2)(A).
R036-P1-C080 The disability exception requires the distribution to be attributable to the taxpayer’s becoming disabled within §72(m)(7): inability to engage in any substantial gainful activity because of a medically determinable physical or mental impairment expected to result in death or to be long-continued and indefinite, with proof in the form and manner required by the Secretary. S001, §72(v)(2)(B), (m)(7). No disability or medical fact inferred.
R036-P1-C081 The periodic-payment exception requires a distribution to be part of substantially equal periodic payments, at least annually, for the taxpayer’s life/life expectancy or the joint lives/joint life expectancies of the taxpayer and beneficiary. A single withdrawal, a repayment schedule, or the insurer’s installment label does not establish this exception. S001, §72(v)(2)(C). No payment method, life-expectancy calculation, or modification conclusion supplied.
R036-P1-C082 The retrieved §72(v)(2) contains the three exceptions in C079–C081. It does not contain §72(q)’s separate death, immediate-annuity, pre-1982-investment, or other listed exceptions. Nor does a reporting code establish a new statutory exception. This does not imply that a death payment is necessarily taxable; §101 must first be addressed. S001, §72(v)(2), compared with (q)(2); S006, §101(a).
R036-P1-C083 For an annuity, §72(q) has its own 10%-of-includible-amount rule and exceptions: taxpayer age 59½; holder’s death or specified primary-annuitant death; disability; qualifying periodic payments; specified qualified arrangements; pre-August 14, 1982 investment; a qualifying funding asset; amounts governed by §72(t); an immediate annuity; and the specified employer-purchased contract following plan termination. These are annuity boundaries, not MEC exceptions. S001, §72(q)(1)–(2)(A)–(J), (s)(6)(B), (u)(4). An immediate annuity requires a single premium/consideration, starting within one year, and substantially equal payments at least annually.
R036-P1-C084 Section 72(q)(3) expressly addresses subsequent modification of qualifying periodic payments, other than death/disability, before age 59½ or within the specified five-year period after payments begin, with recapture and deferral interest. Its §1035-exchange exception requires combined distributions to continue satisfying the periodic-payment requirement. The relevant exchange amendment applies to exchanges after December 31, 2023, with an express no-inference rule for earlier law. S001, §72(q)(3)(A)–(B); P.L. 117-328 div. T §323(e). This annuity recapture text is not automatically imported into §72(v).
R036-P1-C085 An annuity held by a nonnatural person can fall under §72(u)’s current ordinary-income regime rather than ordinary annuity deferral, subject to the natural-person-agent rule and the express estate-at-death, qualified-arrangement, qualified-funding-asset, employer-termination-contract, and immediate-annuity exceptions. Its enactment applicability concerns contributions after February 28, 1986. S001, §72(u)(1)–(4); P.L. 99-514 §1135(b). No entity, ownership, or annual-income computation established.
R036-P1-C086 Unresolved authority issue: the 2026 Form 1099-R code notes refer to modifying substantially equal periodic payments under §72(q), (v), or (t) before five years, even after age 59½. The retrieved §72(v) has no express recapture paragraph corresponding to §72(q)(3). The instruction supports its stated reporting direction; it does not, by itself, establish the substantive §72(v) recapture base, interest, or legal authority. S019, Table 1, code 1 and code 7 notes; S001, §72(v), compared with (q)(3). No independent published authority resolving this issue was established in this investigation. Internal Revenue Service+1

E. Interest and deduction limitations

Claim ID Supported proposition and consequential conditions Exact authority and scope
R036-P1-C087 Section 264(a)(2) denies deductions for amounts paid/accrued on debt incurred or continued to purchase or carry a single-premium life, endowment, or annuity contract. For this purpose, substantially all premiums within four years of purchase, or a post-March 1, 1954 deposit funding a substantial number of future premiums, can make a contract single-premium. The annuity application of (a)(2) is limited to contracts purchased after March 1, 1954. S004, §264(a)(2), concluding applicability sentence, (c)(1)–(2). uscode.house.gov
R036-P1-C088 For contracts purchased after August 6, 1963, §264(a)(3) addresses purchase/carry debt under a plan contemplating systematic direct or indirect borrowing of cash-value increases, from the insurer or otherwise, excluding single-premium contracts already covered by (a)(2). S004, §264(a)(3), concluding applicability sentence.
R036-P1-C089 The four §264(d) exceptions apply to (a)(3): no debt financing of any part of four annual premiums due during the specified seven-year period; otherwise-disallowed annual paid/accrued amounts no more than $100; debt arising from an unforeseen substantial income loss or financial-obligation increase; or trade/business debt. A substantial premium increase restarts that seven-year period when the first increased premium is paid. S004, §264(d)(1)–(4), concluding sentence. These exceptions do not erase (a)(2), (a)(4), or §163.
R036-P1-C090 Section 264(a)(4) separately denies interest deductions on indebtedness with respect to taxpayer-owned life policies covering any individual, or taxpayer-owned endowment/annuity contracts covering any individual, subject to subsection (e). Its purchase-date boundary is after June 20, 1986. It is not conditioned on MEC status. S004, §264(a)(4), concluding applicability sentence; P.L. 99-514 §1003(c).
R036-P1-C091 The key-person exception removes the (a)(4) bar only to the extent aggregate relevant indebtedness for policies/contracts covering the key individual does not exceed $50,000. This is neither a tax-free loan allowance nor a contractual borrowing ceiling. Other deduction restrictions remain. S004, §264(e)(1).
R036-P1-C092 A key person is an officer or 20-percent owner, with the permitted number capped at the greater of five or the lesser of 5% of officers/employees and twenty. Corporate ownership uses direct stock or voting ownership; other entities use capital/profits interests. Controlled-group aggregation applies to the stated ownership test and $50,000 limit, with allocation as prescribed. S004, §264(e)(3)–(5). Incorporated §§52 and 414 business-group application remains outside the completed component.
R036-P1-C093 The key-person/pre-1986 deduction allowance is further capped for months beginning after December 31, 1995 by the monthly corporate-bond benchmark specified in §264(e)(2). For contracts purchased on/before June 20, 1986, fixed-rate contracts use the purchase-month benchmark; variable-rate contracts use the third month before the applicable period. That period is normally successive twelve-month periods, with the statutory shorter-period election, historical 90-day election requirement, and consent-to-revoke condition. S004, §264(e)(2)(A)–(B). No benchmark lookup, historical election, interest rate, or deduction amount established.
R036-P1-C094 Section 264(f) has a separate proportional interest-disallowance regime based on average unborrowed policy cash values for specified post-June 8, 1997 contracts relative to the stated asset denominator. Its unborrowed-value measure generally subtracts loans from cash surrender value determined without surrender charges, with an alternative valuation rule if that does not reasonably approximate actual value. S004, §264(f)(1)–(3), (7). This is a third distinct value measure; no averaging convention or business deduction is computed.
R036-P1-C095 Section 264(f)’s exceptions and coordination matter: specified single-insured business contracts, the owner-and-spouse allowance, §72(u) annuities, qualifying separate master-contract coverage, natural-person ownership, and insurance-company exclusions. The natural-person exception has a business-beneficiary override, with sole-proprietorship/employee-business exclusions and a benefit cap. Partnerships/S corporations are tested at entity level; controlled-group aggregation and coordination with §§264(a), 265, and 263A apply. S004, §264(f)(4)–(8), read completely. Full incorporated business-tax analysis remains excluded.
R036-P1-C096 Premium deduction and interest deduction are separate questions. Section 264(a)(1) denies premiums where the taxpayer is directly or indirectly a beneficiary, subject to the specified annuity exceptions in (b). A premium’s inclusion in §72 investment does not itself create a deduction. S004, §264(a)(1), (b); S001, §72(e)(6).
R036-P1-C097 The 1996 amendments generally apply to interest paid/accrued after October 13, 1995, with a historical transition ending before January 1, 1999 for specified earlier debt. The 1997 amendments generally apply to contracts issued after June 8, 1997, in taxable years ending afterward; material death-benefit increases or other material changes can make a contract new for that transition, and added lives under a master contract have the stated separate treatment. S004, P.L. 104-191 §501(c); S006, P.L. 105-34 §1084(d). Historical transition qualification requires the original debt dates, specified interest cap, aggregation, insured-count limit, and annual percentages; none is applied to current interest.
R036-P1-C098 The historical four-year income-spreading provision concerns otherwise-taxable amounts under specified §264(a)(4) contracts on complete surrender/redemption/maturity, or a qualifying full-discharge refund, during 1996, 1997, or 1998. It is not a general current surrender or lapse spreading rule. The associated historical premium-test provision also has its own express lapse predicate and former-subsection references. S004, P.L. 104-191 §501(d)(1)–(2), as amended. No present relief inferred from the note’s continued display.
R036-P1-C099 Even if a §264 bar does not apply, §163 remains a separate gate. Section 163(a)’s general interest rule is limited by §163(h)’s prohibition of personal-interest deductions for noncorporate taxpayers and applicable exceptions. An exception to a disallowance is not affirmative proof of deductibility. S005, §163(a), (h)(1)–(2); S004. Full deduction tracing and all §163 exceptions remain held.
R036-P1-C100 These tax provisions establish inclusion, exclusion, and deduction conditions. They do not supply a contractual right to borrow, an insurer’s repayment terms, protection against lapse, or a suitability recommendation. A deduction limitation is not a prohibition on borrowing. Scope of S001, S003–S005; contractual/insurance-law analysis expressly excluded by the parent holds.

F. Exchanges and death-benefit boundaries

Claim ID Supported proposition and consequential conditions Exact authority and scope
R036-P1-C101 Section 1035 permits specified exchanges: life to life/endowment/annuity/qualified long-term-care; endowment to qualifying endowment with payments beginning no later, annuity, or qualified long-term-care; annuity to annuity or qualified long-term-care; qualified long-term-care to qualified long-term-care. It does not list annuity-to-life as a permitted direction. Section-specific definitions and the foreign-person limitation remain relevant. S007, §1035(a)–(c). No replacement transaction recommended or assumed.
R036-P1-C102 The read final regulation requires the same insured for insurance exchanges and the same obligee or obligees for annuity exchanges. An ownership/insured change is not automatically a qualifying exchange merely because another contract is acquired. S015, §1.1035-1; current statutory categories in S007 control later additions. Original regulatory issuance-date gap remains recorded.
R036-P1-C103 Money, other property, and liability assumption can prevent complete nonrecognition. Through §1035(d), §1031(b)–(d) supplies gain-recognition, no-loss, basis, and liability-as-money rules. The incorporated §357(d) definition treats recourse and nonrecourse liabilities differently and requires the specified agreement, expected-payment, collateral, and allocation facts. S007, §1035(d); S008, §1031(b)–(d); S009, §357(d)(1)–(3). No automatic conclusion that every loan balance is taxable “boot.”
R036-P1-C104 A qualifying §1035 exchange generally carries the prescribed adjusted investment/basis framework rather than resetting everything to a new cash premium. Separately, §7702A(a)(2) preserves MEC classification through successive exchanges. Income nonrecognition and MEC status are different questions. S007, §1035(d); S008, §1031(d); S002, §7702A(a)(2).
R036-P1-C105 Section 101’s death-payment exclusion is subject to its own exceptions and limits, including transfer-for-value/reportable-sale rules and separate interest treatment. A MEC still satisfies §7702 by definition, so MEC status alone does not establish the death benefit’s tax result. No beneficiary, death, ownership, transfer, or employer facts are supplied. S006, §101(a), (c), (d), (f); S002, §7702A(a); S003, §7702(g)(2). Full death-benefit, estate, gift, and employment analysis remains held.

G. Reporting and withholding are separate from substantive liability

Claim ID Supported proposition and consequential conditions Exact authority and scope
R036-P1-C106 Section 6047(d) authorizes/requires the specified issuer reporting for contracts from which designated distributions may be made, as prescribed. Its $10 aggregate annual threshold is a reporting provision, not an income exclusion. Section 6047(g) coordinates with information required under §6050Y. S021, §6047(d)(1)–(2), (g). Actual filer/event status and full reporting rules remain unestablished.
R036-P1-C107 For §3405 withholding, “commercial annuity” expressly includes a life-insurance or endowment contract issued by a state-licensed insurance company. That withholding definition does not reclassify every life contract as an annuity for §72’s substantive treatment. Designated distributions, exclusions, payor responsibility, and the cash/property withholding limitation require their own predicates. S022, §3405(d), (e)(1), (6), (8). No withholding election, rate, or obligation determined.
R036-P1-C108 Amounts withheld under chapter 24 are credited under §31(a); withholding is not itself the final income-tax liability. S020, §31(a)(1)–(2).
R036-P1-C109 The inspected 2026 instructions identify box 1 as gross distribution, 2a as taxable amount, 2b as relevant determination/distribution checkboxes, 4 as federal income tax withheld, 5 as the specified contributions/premiums recovered, and 7a as distribution codes. The 2026 renumbering must not be silently replaced by an older box-number convention. S019, “What’s New,” and instructions for those boxes. This describes instructions actually read, not a completed form.
R036-P1-C110 The instructions direct reporting of matured/redeemed insurance and annuity payments, but state that a life-insurance surrender need not be reported on Form 1099-R when it is reasonable to believe none of the payment is includible. This conditional instruction does not establish that an actual surrender occurred or that any actual payer met the belief predicate. S019, “Life insurance, annuity, and endowment contracts.”
R036-P1-C111 A qualifying §1035 exchange can be reportable despite nonrecognition. The instructions separately address loan cancellation or other property and provide the stated within-company exception where the transaction is solely an exchange, no designated distribution occurs, and adequate basis records are maintained. S019, “Section 1035 exchange.” This reporting exception is not the substantive qualification test.
R036-P1-C112 In the inspected code table, L is for deemed distributions under §72(p), not every policy loan. Code 6 addresses §1035 exchanges; code 7 includes the stated life/annuity/endowment and failed-§7702 reporting; W addresses qualifying §72(e)(11) long-term-care charges. A code does not prove qualification, income amount, or an additional-tax exception. S019, Table 1, codes 6, 7, L, W; see unresolved code-note issue C086. Internal Revenue Service
R036-P1-C113 No actual information return, withholding entry, payer determination, or tax return has been supplied. Therefore this investigation establishes conditional reporting functions only; it does not establish an actual filing duty, taxable box amount, withholding liability, or final tax bill. Application limits of S019–S022, and the user’s held facts.

3. Provision-specific comparison

Question Qualifying life contract outside MEC treatment MEC Annuity or other separately governed contract Unknown/nonqualifying contract
Classification prerequisite Applicable version of §7702 or historical framework must be satisfied; MEC status must separately be excluded. Must meet §7702 and satisfy §7702A’s failure/exchange definition. Contract and payment classification must be established; qualified arrangements and §72(u) are separate boundaries. No favorable classification is presumed. A state-law life contract failing §7702 can trigger §7702(g).
Ordinary pre-start cash withdrawal §72(e)(5) generally recovers investment before inclusion, subject to benefit-reduction and other overrides. §72(e)(2)(B)/(3) generally allocates income first. Generally the pre-start income-first framework, but old-investment and qualified-arrangement exceptions matter. No ordering rule selected until legal classification is established.
Loan under contract §72(e)(5)(C) generally turns off §72(e)(4)(A) deeming; actual loan character remains necessary. Direct/indirect loan receipt is deemed nonannuity receipt, with income allocation and the specific investment increase. §72(e)(4)(A) can apply to an individual within its framework; grandfathered investment and other exceptions matter. No blanket borrowing exclusion or deemed-distribution rule established.
Assignment/pledge/agreement The same §72(e)(5)(C) switch-off generally applies; an outright transfer remains a different inquiry. Assigned/pledged value can be deemed received; narrow burial/funeral exception may apply. Loan/pledge deeming and the distinct annuity transfer-without-consideration rule must not be confused. Actual legal character, amount, and applicable regime remain unknown.
Complete surrender/refund/maturity §72(e)(5)(E) governs qualifying complete events, with investment recovery. The separate full-event rule must still be considered; MEC status alone does not erase (5)(E). Same full-event provision can apply; regular annuity payments have a different recovery regime. Event classification and any §7702(g) effects must first be resolved.
Lapse/termination with debt No universal result from the label; determine the legal receipt/settlement and reconcile debt, value, investment, and prior treatment. Same event inquiry, plus prior deemed receipts, basis increases, aggregation, and MEC timing. Applicable annuity/other regime and actual event required. No amount, write-off, cancellation-income treatment, or absence of income inferred.
Additional tax §72(v) does not apply merely because it is life insurance. §72(v): 10% of includible amount unless its own exception applies. §72(q) is separate; qualified arrangements have separately held rules. No additional-tax provision or exception selected from labels alone.
Interest deduction §§264 and 163 apply independently of favorable borrowing treatment. Same separate deduction inquiry; MEC status is not the sole test. Relevant §264/§163 provisions and contract-date boundaries remain separate. No deduction inferred.
Reporting Reporting can depend on a later distribution even if an earlier genuine borrowing was not deemed received. A deemed receipt can matter without equivalent cash delivery. Tax-free exchanges and other events may still be reportable. A form or code cannot cure missing substantive classification.

Comparison claim links: C002–C005, C023–C025, C035, C045, C053–C077, C078–C086, C087–C113. Source links: S001–S007, S013, S018–S022.

4. Substantive qualitative branches

“Answered” below concerns the stated public-law rule. Every actual-contract application remains unresolved because the relevant facts are held. “Partial” identifies an additional public-authority gap.

Branch Supported conditional rule and exact claim/source links Missing evidence, held rather than requested Adverse inference to avoid Next permissible public-law inquiry
B01 — Contract qualification unknown Answered rule: §7702 requires applicable-law status plus the selected federal test; failure can invoke §7702(g). C002, C006–C025; S003 §§7702(a)–(g). Applicable qualification regime, selected test, compliance history, any failure or waiver. Marketing category establishes federal life-insurance status; failure means MEC. Read any further published Treasury qualification rule implicated by the identified legal category; no insurer or policy search.
B02 — Life contract versus annuity Answered boundary: §72 distinguishes the contract from whether a payment is received as an annuity; qualified arrangements and §72(u) are separate. C053, C073–C077, C083–C085; S001, S012. Contract classification, payment character, ownership category, annuity starting status. Every insurer-issued product, or every installment payment, gets life-policy loan treatment. Examine the relevant portions of final §1.72 regulations and statutory category definitions only.
B03 — MEC status unknown Answered rule: §7702A requires §7702 qualification plus seven-pay failure or the exchange rule. C035–C048; S002 §7702A(a)–(e). Seven-pay determination, amount-paid history, benefit history, prior exchange status. All permanent policies are MECs, or an unexplained label proves non-MEC status. Further published generic guidance on the particular seven-pay computational issue; no private ruling/request.
B04 — Issue/change/exchange date unknown Answered transitions; partial legacy cross-reference: issue, conversion, change, and exchange dates can select different statutory rules. C007, C028–C034, C044, C049–C052; S002–S003, S006, S014, S024. Relevant legal dates and character of changes; historical unilateral rights. A single original issue date preserves every grandfather rule indefinitely. Read published guidance resolving the relevant transition, including the §7702(i) cross-reference if that category becomes relevant.
B05 — Investment unknown Answered rule: premiums/consideration less prior excluded amounts, with particular deemed-receipt and rider adjustments. C005, C058, C068, C072; S001 §72(e)(4), (6), (11), (g). Premium/consideration history, prior recoveries, taxable deemed receipts, transfer and rider adjustments. Cash value, death benefit, premium total, or debt balance automatically equals investment. Published §72 guidance on the particular adjustment; keep investment and adjusted sale basis separate.
B06 — Loan versus distribution Answered conditional rule: actual loan character matters; the non-MEC switch-off and MEC switch-on differ. C053–C058; S001 §72(e)(1)–(6), (10). Legal character of advance, direct/indirect receipt, pre/post-annuity-start status. Any cash delivery is taxable income, or every item called a loan is excluded. Published interpretation of the precise generic transaction category under §72(e).
B07 — Collateral assignment/pledge Answered rule: an agreement to assign/pledge a portion can trigger MEC deeming; narrow burial exception is separate. C057, C059, C071–C072; S001 §72(e)(4), (10)(B), (g). Portion affected, collateral versus ownership transfer, agreement, purpose, maximum benefit. No cash means no possible receipt; every assignment is a sale; entire face amount is deemed received. Published final rules or interpretations distinguishing collateral assignment, outright transfer, and the statutory burial exception.
B08 — Outstanding debt and interest unknown Partial: distinguish principal, accrued/capitalized interest, new advances, repayment, and later application of value. C058, C065–C066; S001, S018. Debt composition, prior taxation, capitalization mechanics, later settlement character. All outstanding debt is newly taxable each year; retirement-plan accrued-interest instructions govern policy loans. Search only published Treasury/IRS guidance on capitalization, repayment, and repeated deemed receipts under §72(e).
B09 — Surrender/lapse/termination unknown Answered surrender rule; partial exhaustive lapse treatment: complete events invoke §72(e)(5)(E); labels alone do not establish a receipt. C061–C065; S001, S013, S016–S018. Actual event, proceeds/value application, surviving rights, discharged obligation, prior basis recovery. Every lapse produces the same tax, or a lender necessarily writes off debt. Published generic guidance specifically addressing the relevant noncash termination mechanism; no case-record inquiry.
B10 — Gross proceeds versus cash received Answered distinction; partial event measure: reconcile gross contract receipt, debt application, charges, withholding, and net cash without double counting. C003–C005, C056, C064, C109; S001, S003, S018–S019. Gross settlement components and prior taxable/excluded amounts. Zero cash proves zero income; debt is counted both in gross proceeds and again as a basis reduction. Published guidance identifying the legally appropriate gross/net convention for the event.
B11 — Aggregation/related contracts unknown Answered statutory rules: calendar-year MEC/annuity grouping differs from all-prior-contract small-benefit grouping and same-owner burial grouping. C012, C042, C070; S001–S003. Same-company, same-policyholder/owner, issue-calendar-year, prior-contract, and excluded-plan predicates. Every related contract aggregates, or none does; “contract year” means calendar year. Published anti-abuse regulations or interpretations for the precise aggregation provision.
B12 — Additional-tax exception unknown Answered statutory exceptions; partial modification issue: §72(v) taxes the includible portion, with taxpayer-age, disability, or qualifying periodic-payment exceptions. C078–C086; S001, S019. Taxpayer-role facts, relevant age/event, qualifying payment series; all remain held. Insured age suffices; hardship or annuity death exceptions automatically transfer to MECs. Published authority resolving §72(v) periodic-payment methods/modification and the instruction’s five-year reference.
B13 — Interest deduction separate Answered restrictions: §§264/163 impose independent gates and narrow exceptions. C087–C099; S004–S005, S006 note. Purchase/debt dates, purpose, ownership, business/key-person predicates, actual interest/elections. Nontaxable loan proceeds imply deductible interest; a §264 exception proves a deduction. Generic published guidance for the specifically implicated §264 or §163 limitation, within the parent’s deduction hold.
B14 — Reporting versus substantive tax Answered distinction: reporting fields and withholding classify information, not final liability; code L is §72(p). C086, C106–C113; S019–S022. Actual reportable event, payer predicates, report/version, withholding facts. A sample box, code, or withholding amount establishes tax or a filing duty. Current public instructions and relevant final reporting regulations for the identified event; no filling or filing.
B15 — Death/beneficiary treatment not established Answered boundary: §101 is separate, with its own exceptions; MEC status alone does not determine a death benefit. C025, C082, C105; S002–S003, S006. Death, beneficiary-role, transfer, ownership, and other §101 predicates. “Death benefits are tax-free” supplies authority for lifetime borrowing. Only the relevant published §101 provision if this boundary must later be developed; full death-benefit work stays held.
B16 — Tax rule versus insurance consequence Answered scope distinction: tax treatment supplies no borrowing right or coverage/suitability conclusion. C100; S001, S003–S005. Contractual rights, interest terms, repayment, lapse/coverage effects, nonfederal law. A favorable tax branch makes borrowing safe, available, or advisable. No further inquiry in this pass; those subjects are expressly held.
B17 — Benefit reduction unknown Answered rules: first-seven-year MEC retesting and first-fifteen-year cash-distribution recapture are different; each has its own lookback/exceptions. C015–C020, C038, C044–C045; S002–S003. Reduction type/date, distribution relationship, reinstatement, joint-life structure. A non-MEC withdrawal is invariably investment-first; all reductions use one clock. Published guidance on the identified reduction and the relevant statutory ceiling or retesting rule.
B18 — Exchange unknown Answered statutory boundary; partial historic regulation metadata: permitted direction, same-insured/obligee, boot/liability, basis, and MEC carryover are separate. C101–C104; S002, S007–S009, S015. Exchange character, consideration, debt assumption, qualifying roles, prior status. A replacement resets MEC status or every debt balance is taxable exchange consideration. Published §1035 interpretation and original final-rule history pertinent to the precise generic exchange issue.
B19 — Long-term-care charge/rider unknown Answered conditional rule: qualifying value-funded charges have special exclusion/investment reduction; qualifying rider changes have a specific material-change exception. C068–C069; S001, S011. Qualified rider status, charge character, relevant dates, incorporated qualification predicates. Every rider charge is an ordinary withdrawal; every rider addition creates a new MEC test period. Published §7702B/§72(e)(11) guidance and applicable incorporated standards, without medical or policy records.
B20 — Annuity starting date unknown Answered boundary: nonannuity receipts before and after that date, regular annuity payments, and full-surrender/refund amounts use different provisions. C053, C056–C057, C061, C073–C075; S001, S012–S013. Payment character, starting date, partial-annuitization allocation, option exercise. Pre-start income-first or life-contract recovery rules apply unchanged after annuitization. The precise final §72 regulation and historical effective-date provision governing the relevant payment category.

5. Wholly blank evidence and audit worksheet

Only field labels are supplied. Every evidence, authority, and assessment entry is blank. No identifying fields, hypothetical entries, default outcomes, dates, amounts, or checked boxes are populated.

Audit field Evidence / entry Authority / version / pinpoint Assessment / unresolved issue
Federal contract category
Applicable qualification regime
Applicable-law qualification predicate
Selected §7702 qualification test
Qualification continuity or failure
Issue-date predicate
Historical transition predicate
Contract-year convention
Material-change predicate
Benefit-reduction predicate
Reinstatement predicate
Exchange predicate and direction
Prior MEC or successor-exchange status
Seven-pay determination
Seven-pay amount-paid adjustments
Premium-return predicate
Investment-in-contract components
Prior excluded distributions
Prior taxable deemed receipts
Transfer-for-value adjustment
Annuity starting-date predicate
Cash receipt characterization
Loan receipt characterization
Assignment / pledge / agreement characterization
Assigned or pledged portion measurement
Burial/funeral exception predicate
Outstanding principal characterization
Accrued interest characterization
Capitalized interest characterization
Repayment characterization
Cash-value measurement convention
Surrender-value measurement convention
Complete-surrender/refund predicate
Lapse / termination / discharge characterization
Gross contract receipt components
Debt application or assumption components
Net cash reconciliation
Prior-treatment reconciliation
Calendar-year aggregation predicate
Other statutory aggregation predicate
Additional-tax inclusion base
Taxpayer-age exception predicate
Disability exception predicate
Periodic-payment exception predicate
Periodic-payment modification authority
Separate interest-deduction provision
Long-term-care rider/charge predicate
Reporting provision and version
Reporting versus withholding reconciliation
Death-benefit boundary
Contractual-consequence boundary
Source legal status
Source applicability/effective date
Source access date
Printed page
Zero-based PDF index
Actual read extent
Authority gap
Next permissible public-law inquiry
Researcher self-check

6. Calculation and illustration decision

No numerical illustration or actual calculation is supplied. The statutory percentages, dollar thresholds, dates, and periods above are legal predicates taken from the cited provisions; they are not arbitrary teaching inputs.

The missing inputs prevent a reliable numerical application: applicable statutory era, contract qualification, MEC determination and lookback, receipt character, immediately preceding statutory value, investment and prior recoveries, aggregation, debt application, taxable deemed-receipt adjustments, and any additional-tax exception. Actuarial assumptions, averaging conventions, and event-specific gross/net treatment are also not all established.

The appropriate qualitative sequence is:

  1. Establish the applicable contract category and statutory version.
  2. Determine whether the event is an actual receipt, deemed receipt, annuity payment, complete surrender/refund, or a different event.
  3. Apply the correct aggregation and special benefit-reduction or rider provisions.
  4. Select the proper value and investment measurements and ordering rule.
  5. Reconcile prior taxation, investment adjustments, debt, gross receipt, and net cash without double counting.
  6. Apply §72(v), if relevant, only to the resulting includible amount and only after testing its exceptions.
  7. Address interest deduction, reporting, and withholding separately.

Illustration reference E0: no illustration, for the reasons just stated. Claim links: C003–C005, C016–C020, C045–C070, C078–C099, C103–C113.

7. Granular coverage and crosswalk

Status meanings: “Answered” means the generic rule or boundary is established by the identified read authority. “Partial” means a material public-law or version issue remains. “Unresolved” means actual application cannot be determined from the absent facts. “Excluded” means the user expressly reserved the subject or it is unnecessary to the selected comparison.

Requested item / subquestion Status Finding and evidence crosswalk Missing evidence or exact next permissible inquiry
1 — Complete material §72 provisions Answered, selected complete provisions S001 read bounds; C005, C053–C086; B05–B14, B20. Actual application unresolved; no claim of whole-§72 reading.
1 — Actual life-contract definition Answered C002–C034; S003, S006, S014, S024; B01–B02. Qualification facts held; targeted further published qualification guidance only.
1 — Actual MEC definition and seven-pay computation Answered statutory framework C035–C048; S002; B03, B17. Actual actuarial test and contract facts held.
1 — Investment and distinct value definitions Answered C003–C005, C013, C046, C056, C058, C094; S001–S004. Actual measurement inputs absent; no interchange of definitions.
1 — Nested benefit-reduction/material-change rules Answered C015–C020, C038–C045, C069; S002–S003, S011. Actual reduction/change/rider predicates held.
1 — Issue/exchange/grandfather triggers Answered with specific partial issue C007, C028–C034, C044, C049–C052, C060, C070; S001–S003, S006, S014. §7702(i)’s post-2020 legacy cross-reference remains partial; next inquiry is published Treasury/IRS interpretation.
1 — Aggregation Answered statutory rules C012, C042, C070, C092, C095; B11. Additional regulatory anti-abuse application not presumed; exact statutory grouping facts held.
1 — No uniform permanent-policy/loan/balance inference Answered boundary C002, C035, C054–C066, comparison table. No actual classification supplied.
2 — Non-MEC versus MEC Answered C035, C054–C059, C070, C078–C082; S001–S002. Application unresolved without qualification/MEC evidence.
2 — Annuity and excluded-contract comparison Answered to necessary boundary C026, C060, C071, C073–C077, C083–C085. Full annuity/retirement analysis excluded; B02, B20 identify permitted next inquiry.
2 — Unknown/nonqualifying category Answered conditional rule C023–C025; S003 §7702(g); B01. Actual failure and annual/catch-up amounts unresolved.
2 — Loan and collateral assignment/pledge Answered statutory trigger C054–C059, C071–C072; B06–B07. Character, affected portion, timing, and exceptions unknown.
2 — Cash distribution ordering and investment recovery Answered conditional rule C005, C016–C020, C053–C061, C067–C075. Receipt/start-date/aggregation inputs absent.
2 — Complete surrender/refund/maturity Answered C061–C064; S001, S013, S016–S018. Actual amount received and prior investment unknown.
2 — Lapse/termination/discharge and zero-cash events Partial public-law coverage; unresolved application C064–C066; B08–B10. Need event-specific published authority and absent event mechanics; no case or record query.
2 — Separate cash, income, liability, policy debt, and later event Answered analytical distinction C005, C057–C058, C064–C066, C103, C107–C113. No actual reconciliation possible.
3 — MEC additional-tax base/rate Answered C078; S001 §72(v)(1). Includible amount unknown; E0.
3 — Age/disability/periodic-payment exceptions Answered statutory predicates C079–C082; S001 §§72(v)(2), (m)(7); B12. Actual taxpayer/event evidence held.
3 — Periodic-payment modification/recapture Partial C084, C086; S001 versus S019. Published §72(v)-specific authority resolving instruction/statute tension not established.
3 — Necessary interest-deduction provisions Answered statutory gates; application excluded/held C087–C099; S004–S006; B13. Full deduction tracing, business ownership, rates, elections, and calculations held.
3 — No borrowing prohibition from deduction restriction Answered boundary C091, C099–C100. Contractual rights and insurance consequences excluded.
3 — No §72(p), consumer-loan, or death-benefit importation Answered boundary C065–C066, C077, C082, C105, C112. Other components and full death/COD regimes excluded.
4 — Necessary final regulations Answered selected reading; partial original-history verification S012–S015; C029, C061, C073, C102. Original §1.1035-1 issuance/effectiveness and complete old-T.D. histories not verified.
4 — Published IRS interpretation and modification status Answered S016–S018; C062–C064. No universal loan-lapse conclusion extrapolated from a loan-free ruling situation.
4 — Public instructions, version, fields, reporting function Answered selected material body S019; C086, C109–C112. Exact issuance day not established; no whole-document/form-pixel claim.
4 — Reporting/withholding authority Answered boundary S020–S022; C106–C108, C113. Actual obligation and full reporting rules held.
4 — Primary-source status/access/read bounds Answered with disclosed gaps Source register, C001, source-read/failure log. Compilation dates are not a complete later-law or judicial audit.
5 — Provision-specific comparison Answered Section 3; C002–C113 as linked there. All actual applications remain unresolved.
5 — At least twelve substantive branches Answered: B01–B20 Each branch contains rule, C/S links, missing evidence, adverse inference, next inquiry. None populated with an identifying entry.
5 — Wholly blank evidence/audit worksheet Answered Section 5. All entry cells deliberately blank.
5 — No borrowing/surrender/lapse/replacement recommendation Answered scope requirement C100; B16, B18. Suitability and contractual consequences excluded.
6 — Optional mathematical illustration Omitted with reason E0; Section 6. Missing trigger, measurement, ordering, aggregation, and convention inputs.
6 — No actual deadline/value/deduction/tax bill Answered scope requirement E0; no application numbers supplied. Statutory dates and thresholds are stated only as law.
Parent holds and other A036 components Excluded with reason C077, C100, C105, C113; B13, B15–B16. Retirement, equity, family help, savings/asset sales, other taxes, nonfederal law, insurer practices, and full remedies/reporting remain reserved.
Independent review / acceptance Not performed or claimed Researcher self-check below. No component, parent, operational, or publication acceptance.

8. Source-read and failure log

The source register is the successful-read log: it distinguishes whole-section reads, selected complete provisions, selected instruction bodies, and parsed PDF text.

Log entry What occurred Treatment and remaining limit
R036-P1-F001 — Legacy OLRC routes Initial legacy granule-based requests for §§72, 7702A, 7702, and 264 failed. Recovered the official versioned bodies recorded in S001–S004. Failure was not treated as absence of law.
R036-P1-F002 — Intermittent versioned-page access A later direct request to https://uscode.house.gov/us/usc/119-124/t26/s72/ returned inaccessible. Reopening the previously retrieved official source succeeded; the complete relevant §72(e) body was re-read. The failed request does not negate the successful read.
R036-P1-F003 — Current-edition redirects Some current OLRC routes first returned only a redirect page; certain direct version guesses also failed. The actual “Continue” links were followed to the source bodies, including §§1031, 6047, and 807. Redirect/index text was not used as substantive law.
R036-P1-F004 — Additional §7702 regulation lead An attempted §1.7702-1 access did not supply a usable body. No rule was inferred from that failure, and no proposed or unavailable text was treated as operative. The successfully read age regulation is specifically §1.7702-2.
R036-P1-F005 — Search results outside scope Generic searches returned some private determinations, case discussions, and provider-related material among results. Those materials were not followed or relied on. No identifying-party, policy, account, case-record, or provider investigation was conducted.
R036-P1-F006 — Truncated retrieval output Some long statutory outputs were truncated. Material sections and notes were reopened or read in bounded portions. Whole-read claims are confined to the instruments identified as whole in the source register.
R036-P1-F007 — PDF modality S016 and S017 were available as parsed PDF text. All stated PDF pages were read as text. Printed pages and zero-based indexes are separately recorded. No claim of pixel or unseen scan inspection.
R036-P1-F008 — Publication metadata limits Exact issuance/revision days were not established for the 2025 publication and 2026 instructions; original issuance/effectiveness of §1.1035-1 was not verified. These are explicit metadata gaps. Version headings and current codification were not substituted for original issuance/effectiveness findings.
R036-P1-F009 — Same instrument in multiple formats Rulings and T.D. 9287 were encountered in PDF/eCFR/IRB formats. Formats are grouped under one source ID per instrument. They are not counted as independent corroboration.
R036-P1-F010 — Targeted unresolved-authority searches Generic official-source searches did not establish a complete §72(v)-specific recapture authority or one exhaustive rule covering every zero-cash lapse and capitalized-interest configuration. The gaps remain C065–C066 and C086. A failed or unproductive search is not a finding that no law exists.

9. Explicit gaps and limits

  1. Actual application is unresolved throughout. The contract, role, qualification, issue/change/exchange, MEC, investment, value, debt, interest, premium, distribution, lapse, surrender, death, reporting, and return facts remain held. No actual or invented policy was substituted.
  2. The lapse/discharge boundary is not reduced to a universal formula. The full-surrender statute, loan/pledge deeming statute, and Publication 525 explanation establish necessary distinctions. They do not support declaring that every lapse causes a specified amount of income, every balance is forgiven, or every zero-cash event is nontaxable.
  3. The §72(v) periodic-payment modification issue remains open. The reporting instruction’s reference to a five-year modification rule has been recorded, but a substantive MEC-specific recapture rule, base, and interest computation have not been established from the authorities read.
  4. Certain qualification subfields remain conditional rather than certified. These include detailed variable-contract diversification, incorporated long-term-care standards, regulatory allowances expressly conditioned on regulations, and the legacy §7702(i) rate cross-reference after the 2020 amendment.
  5. Historical statutory text is not present relief. The report separates current codified rules, historical grandfather provisions, expired transition windows, and later-effective amendments. No proposed rule is used as operative authority, and no withdrawn instrument is relied on.
  6. Full deductions, reporting, penalties, remedies, and current judicial history remain reserved. The selected deduction and reporting provisions establish boundaries necessary to this component; they do not resolve the parent’s broader held subjects.

10. Researcher self-check — not independent review

  • The actual statutory definitions precede application of the shorthand MEC, investment, and statutory cash-value measures.
  • Non-MEC life treatment, MEC treatment, annuity treatment, and qualification failure are separately traced.
  • Cash delivery, deemed receipt, gross-income inclusion, investment adjustment, outstanding debt, debt settlement, withholding, and final tax liability are not equated.
  • The distinct seven-year, fifteen-year, five-year, two-year, contract-year, and calendar-year provisions are linked to their own triggers.
  • The burial qualification rule, MEC burial assignment exception, small-benefit seven-pay adjustment, and long-term-care rider rules are kept separate.
  • No retirement-plan loan rule or report was used as a foundation; the limited §72(p) references identify the boundary only.
  • No actual tax calculation, deadline, recommendation, contract right, insurer practice, personal record, or identifying entry was supplied.
  • The source register discloses legal status, version, read extent, PDF modality, access date, and the outstanding authority gaps.

This is the same researcher’s self-check. It is not independent review, component acceptance, parent acceptance, operational acceptance, or publication acceptance.

END R036 PASS-01

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Captured cells with original header handling and explicitly labeled bounded correction overlays. Downloaded JSON retains original cells. Tables may contain source limitations, historical examples and identified corrections; the complete reading supplies context.

Read the evidence with its boundaries. These are saved research components, including revisions. A scoped coordinator review checks selected evidence; it does not certify every claim, a complete jurisdiction, current law or individual applicability. Dates and access limits remain attached to the records.

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Captured table 01

Source ID · Issuer, instrument, and complete literal HTTPS URL · Version, legal status, and effectiveness · 24 data rows

Source IDIssuer, instrument, and complete literal HTTPS URLVersion, legal status, and effectivenessActual read bounds, precise pinpoints, and limits
R036-P1-S001Congress; OLRC, 26 U.S.C. §72, Annuities; certain proceeds of endowment and life insurance contracts. https://uscode.house.gov/us/usc/119-124/t26/s72/Retrieved text through P.L. 119-124, October 15, 2026. Statute as amended; applicable historical and transition provisions must be selected separately.Read complete (a)–(c), (e)(1)–(12), (f), (g), (h), (j), (l), (m)(7), (q), (u), and (v); selected (p)(1), (p)(5), and (s)(6)(B) for boundaries only. Read material amendment/effective-date notes concerning 1982, 1984, 1986, 1988–1989, 1996, 2006, 2010, and the relevant 2022 annuity amendment. Not a whole-§72 or whole-notes read. uscode.house.gov +2
R036-P1-S002Congress; OLRC, 26 U.S.C. §7702A, Modified endowment contract defined. https://uscode.house.gov/us/usc/119-121/t26/s7702A/Retrieved text through P.L. 119-121, October 9, 2026. Added by P.L. 100-647, §5012(c), November 10, 1988; substantive applicability generally begins with contracts entered into on or after June 21, 1988, subject to the reproduced transitions.Whole section (a)–(e), source credit, amendments, effective-date notes, and 2002 construction note read. Particularly §§7702A(a), (c)(2)–(6), (d), (e), and P.L. 100-647 §5012(e), as amended. uscode.house.gov
R036-P1-S003Congress; OLRC, 26 U.S.C. §7702, Life insurance contract defined. https://uscode.house.gov/us/usc/119-124/t26/s7702/Retrieved text through P.L. 119-124, October 15, 2026. Added July 18, 1984. The 2020 interest-assumption amendments apply to contracts issued after December 31, 2020. Other applicability rules are detailed below.Whole section (a)–(k), source credit, amendments, and displayed notes read. Material pinpoints: (b)–(f) qualification and measurements; (f)(7) benefit-reduction recapture; (g) failure; (i)–(j) special categories; P.L. 98-369 §221(d), P.L. 116-260 div. EE §205(e). uscode.house.gov +1
R036-P1-S004Congress; OLRC, 26 U.S.C. §264, Certain amounts paid in connection with insurance contracts. https://uscode.house.gov/us/usc/119-134/t26/s264/Retrieved text through P.L. 119-134, October 20, 2026. Current statutory body includes separate purchase-date rules and historical transition provisions.Whole section (a)–(f), source credit, amendments, and displayed notes read. §§264(a)(2)–(4), (c)–(f), and P.L. 104-191 §501(c)–(d) are material. Full business-deduction application remains excluded. uscode.house.gov
R036-P1-S005Congress; OLRC, 26 U.S.C. §163, Interest. https://uscode.house.gov/us/usc/119-134/t26/s163/Retrieved text through P.L. 119-134, October 20, 2026.Selected (a), (h)(1), and (h)(2) read for the separate deduction gate. Not a complete §163, investment-interest, business-interest, residence-interest, or other personal-interest-exception analysis. uscode.house.gov
R036-P1-S006Congress; OLRC, 26 U.S.C. §101, Certain death benefits. https://uscode.house.gov/us/usc/119-134/t26/s101/Retrieved text through P.L. 119-134, October 20, 2026.Read (a)–(f), with (f)’s concluding clauses separately completed. Used (a), (c), and (d) only as death-benefit boundaries; read (f) completely for pre-1985 flexible-premium predicates. Read P.L. 105-34 §1084(d) note concerning post-June 8, 1997 contracts and material changes. Not a complete death-benefit or employer-owned-insurance analysis. uscode.house.gov +2
R036-P1-S007Congress; OLRC, 26 U.S.C. §1035, Certain exchanges of insurance policies. https://uscode.house.gov/us/usc/119-134/t26/s1035/Retrieved text through P.L. 119-134, October 20, 2026. Long-term-care exchange amendments apply to exchanges after December 31, 2009.Whole (a)–(d), source/amendment/effective-date notes read. Foreign-person regulatory limitation identified but not developed. uscode.house.gov
R036-P1-S008Congress; OLRC, 26 U.S.C. §1031, Exchange of real property held for productive use or investment, incorporated provisions. https://uscode.house.gov/us/usc/119-134/t26/s1031/Retrieved text through P.L. 119-134, October 20, 2026.Read complete (b)–(d) because §1035(d) incorporates them. No real-estate exchange timing rules applied. Not a whole-section/history read. uscode.house.gov
R036-P1-S009Congress; OLRC, 26 U.S.C. §357, Assumption of liability, incorporated definition. https://uscode.house.gov/us/usc/119-134/t26/s357/Retrieved text through P.L. 119-134, October 20, 2026.Read complete (d)(1)–(3) for the liability-assumption definition incorporated by §1031(d). Corporate-transfer treatment and complete historical applicability not investigated. uscode.house.gov
R036-P1-S010Congress; OLRC, 26 U.S.C. §817, Treatment of variable contracts. https://uscode.house.gov/us/usc/119-134/t26/s817/Retrieved text through P.L. 119-134, October 20, 2026.Read complete (d) and (h) for variable-contract and diversification boundaries. Treas. Reg. §1.817-5 and underlying asset qualification were not comprehensively investigated. uscode.house.gov
R036-P1-S011Congress; OLRC, 26 U.S.C. §7702B, Treatment of qualified long-term care insurance. https://uscode.house.gov/us/usc/119-134/t26/s7702B/Retrieved text through P.L. 119-134, October 20, 2026. Includes 1996 enactment and 2006 coordination notes.Read (b), (c), (e), (g) and material displayed notes, including P.L. 104-191 §321(f)(4). No medical-status determination, state-law qualification investigation, or complete reading of incorporated insurance model standards. uscode.house.gov +1
R036-P1-S012Treasury; eCFR, Treas. Reg. §1.72-2, Applicability of section 72. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR807fc2326e73cb3/section-1.72-2Codified final regulation; retrieved eCFR status through October 22, 2026. Source history includes T.D. 6500, November 26, 1960; T.D. 6497, October 20, 1960; T.D. 6885, June 2, 1966.Read (a)(1)–(2), (b)(1)–(3) and source note. Used for annuity/nonannuity boundary, subject to later statutes. Original Treasury-decision preambles and all historical effectiveness provisions not read. ecfr.gov +1
R036-P1-S013Treasury; eCFR, Treas. Reg. §1.72-11, Amounts not received as annuity payments. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR807fc2326e73cb3/section-1.72-11Codified final regulation; retrieved status through October 16, 2026. Source history includes T.D. 6500, November 26, 1960; T.D. 6885, June 2, 1966; T.D. 8115, December 19, 1986.Whole (a)–(h) and source note read. Material surrender provision (d)(1)–(2). Historical caps and obsolete cross-references were not treated as overriding amended §72. Full original-decision effectiveness audit not performed. ecfr.gov +2
R036-P1-S014Treasury, Treas. Reg. §1.7702-2, Attained age of the insured under a life insurance contract; T.D. 9287. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRc1c6d714d9aed32/section-1.7702-2. Same instrument in https://www.irs.gov/irb/2006-46_IRB.Final T.D. 9287, September 13, 2006, 71 FR 53970; effective that day, with distinct contract applicability under paragraph (f). First retrieved eCFR snapshot through October 13, 2026. IRB publication November 13, 2006.Whole regulation (a)–(f), including examples and applicability, read. Selected T.D. preamble/version material read in IRB, not the whole bulletin. These formats are one instrument, not independent corroboration. ecfr.gov +1
R036-P1-S015Treasury; eCFR, Treas. Reg. §1.1035-1, Certain exchanges of insurance policies. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRbf83dcc4bd89326/section-1.1035-1Codified final regulation; retrieved status through October 23, 2026. Original issuance/effective date not verified in the retrieved section.Whole section text read. Same-insured/same-obligee and money/other-property provisions used. Its older exchange-category wording was read with current §1035, including later long-term-care amendments. ecfr.gov
R036-P1-S016IRS, Rev. Rul. 2009-13. https://www.irs.gov/pub/irs-drop/rr-09-13.pdf. Published in https://www.irs.gov/irb/2009-21_IRB.Published IRS interpretation, 2009-21 I.R.B. 1029, May 26, 2009. Modified by S017; not relied on as an unmodified instrument.All 12 PDF pages read as parsed text, indexes 0–11. Surrender analysis: printed pp. 3–5 / indexes 2–4; holding 1: printed p. 11 / index 10. Its surrender situation has no outstanding loan or prior withdrawals. No PDF-pixel inspection claimed; no case opinions investigated. irs.gov +1
R036-P1-S017IRS, Rev. Rul. 2020-05. https://www.irs.gov/pub/irs-drop/rr-20-05.pdf. Published in https://www.irs.gov/irb/2020-09_IRB.Published IRS interpretation, 2020-9 I.R.B. 454, February 24, 2020. Its stated effective date is transactions on or after August 26, 2009.All six PDF pages read as parsed text, indexes 0–5. Material modification discussion printed pp. 4–5 / indexes 3–4; effect on other documents and effective date printed p. 6 / index 5. Used to establish S016’s modified status, not to regenerate an asset-sale component. No pixel inspection. irs.gov +1
R036-P1-S018IRS, Publication 525 (2025), Taxable and Nontaxable Income. https://www.irs.gov/publications/p525Public explanatory publication, 2025 version; exact original issuance/revision day not established. It is not a statute or final regulation.Selected “Life Insurance Proceeds,” especially complete “Surrender of policy for cash” paragraph, read. Not the whole publication. Its simplified treatment of unrepaid loans is qualified below; it does not establish all lapse scenarios. Internal Revenue Service
R036-P1-S019IRS, Instructions for Forms 1099-R and 5498 (2026). https://www.irs.gov/instructions/i1099rPublic reporting instructions, 2026 version; exact issuance/revision day not established. A tax-year heading is not a substantive effective-date finding.Read material body: life-insurance/annuity/endowment reporting; §1035 exchanges; boxes 1, 2a, 2b, 4, 5, 7a; relevant distribution-code entries and notes. Not whole instructions; no blank-form PDF or pixels inspected; no form completed. The §72(v) periodic-payment coding issue is explicitly unresolved below. Internal Revenue Service +3
R036-P1-S020Congress; OLRC, 26 U.S.C. §31, Tax withheld on wages, incorporated credit rule. https://uscode.house.gov/us/usc/119-134/t26/s31/Retrieved text through P.L. 119-134, October 20, 2026.Complete (a)(1)–(2) read for crediting chapter 24 withholding. Not a return or tax-payment calculation. uscode.house.gov
R036-P1-S021Congress; OLRC, 26 U.S.C. §6047, Returns relating to certain trusts and annuity plans. https://uscode.house.gov/us/usc/119-134/t26/s6047/Retrieved text through P.L. 119-134, October 20, 2026.Selected complete (d)(1)–(2), (g), (h) and relevant source/amendment notes read. §6047(d)’s issuer reporting rule and §6050Y coordination identified; complete reporting obligations excluded. uscode.house.gov
R036-P1-S022Congress; OLRC, 26 U.S.C. §3405, Special rules for pensions, annuities, and certain other deferred income. https://uscode.house.gov/us/usc/119-134/t26/s3405/Retrieved text through P.L. 119-134, October 20, 2026.Read (a)–(e)(13). Relied on (d), (e)(1), (e)(6), and (e)(8) to distinguish reporting/withholding classification, payor duties, cash limitations, and substantive income treatment. No full withholding determination or rate calculation. uscode.house.gov
R036-P1-S023OLRC, Currency and Updating; Classification Tables; 2026 classification table. https://uscode.house.gov/currency.html; https://uscode.house.gov/classification/tables.html; https://uscode.house.gov/classification/tbl119cd_2nd.htmlPublisher currency and classification metadata; not substantive tax authority.Currency and table-explanation pages read; 2026 table header and entire Title 26 block read. Not the entire classification table or a full session-law audit. US Code +2
R036-P1-S024Congress; OLRC, 26 U.S.C. §807 notes, P.L. 115-97 §13517(c). https://uscode.house.gov/us/usc/119-124/t26/s807/Retrieved text through P.L. 119-124, October 15, 2026. Enactment December 22, 2017; specified amendments apply to taxable years beginning after December 31, 2017.Read complete §13517(c)(1)–(3) effective-date, transition, and transition-relief note. Not whole §807. The reserve transition was not imported into policyholder loan taxation. uscode.house.gov
Source links captured in this table

Captured table 02

Claim ID · Supported proposition and consequential conditions · Exact authority and scope · 34 data rows

Claim IDSupported proposition and consequential conditionsExact authority and scope
R036-P1-C001The retrieved statutory versions and targeted classification check support the version statements in the source register. They do not establish that every later enactment, judicial development, or original regulatory effective-date instrument was audited.S001–S024, their stated currency/read bounds; S023, currency page and 2026 Title 26 classification block.
R036-P1-C002Under the generally applicable §7702 definition, a life-insurance contract must be life insurance under applicable law and satisfy either the cash-value-accumulation test or both the guideline-premium requirements and cash-value corridor. A product label does not establish these elements. The church-plan exception is separately addressed in C027.S003, §7702(a)(1)–(2), (j). uscode.house.gov
R036-P1-C003For §7702, “cash surrender value” means cash value determined without regard to a surrender charge, policy loan, or reasonable termination dividends. Thus this statutory measurement can differ from cash deliverable after charges and debt offsets.S003, §7702(f)(2)(A). This is a section-specific definition, not a universal definition for every tax provision or contract.
R036-P1-C004For §7702, “net surrender value” takes surrender charges into account but disregards policy loans. It is therefore distinct from both C003’s measure and net cash actually paid.S003, §7702(f)(2)(B).
R036-P1-C005For §72(e), investment in the contract on a date is aggregate premiums or other consideration paid before that date, reduced by prior amounts received to the extent excludable under the subtitle or prior income-tax laws. The specific adjustments in C058, C068, and C072 must also be considered. “Basis” is not assumed to equal premiums, account value, or loan balance.S001, §72(e)(6), (e)(4)(A), (e)(11), (g). uscode.house.gov
R036-P1-C006The cash-value-accumulation test requires contract terms preventing cash surrender value at any time from exceeding the net single premium needed then to fund future benefits. Computation uses the greater of the applicable accumulation-test minimum rate or guaranteed issue rates, the specified mortality/additional-benefit charge rules, and the specified current/future-benefit assumptions.S003, §7702(b)(1)–(2), incorporating (c)(3)(B)(i)–(ii), (e)(1)(A), (D).
R036-P1-C007For contracts issued after December 31, 2020, the accumulation-test minimum is the lesser of 4% and the statutory insurance interest rate at issue; the guideline-premium minimum is that accumulation minimum plus two percentage points. The insurance interest rate is the lesser of the specified valuation and federal-rate measures for the adjustment year, or latest adjustment year. The federal-rate measure averages the prescribed 60 monthly mid-term rates, annually compounded, and rounds to the nearest whole percentage point. The statutory 2% transition begins January 1, 2021 and ends before the first adjustment year after 2021; it is not proof of a universal 2026 rate.S003, §7702(b)(3), (c)(3)(E), (f)(11)(A)–(E); P.L. 116-260 div. EE §205(e). No rate series or actuarial calculation performed.
R036-P1-C008Under the guideline-premium route, cumulative premiums paid cannot exceed the guideline-premium limitation at any time. That limitation is the greater of the guideline single premium or the sum of guideline level premiums to that date.S003, §7702(c)(1)–(2).
R036-P1-C009The guideline single premium is determined at issue, except for required adjustments, using the statutory mortality, reasonably expected charge, and interest assumptions. An unspecified charge is zero for this computation; industry experience substitutes for insufficient company experience only to the extent provided by regulations. Guideline level premiums run over a period not ending before insured age 95, using the accumulation minimum instead of the higher guideline minimum. Prevailing tables and the statutory three-year table-transition option are separately relevant.S003, §7702(c)(3)–(4), (f)(10). Current mortality clause uses the statutory alternatives in (c)(3)(B)(i); no actual table or charge assumption established.
R036-P1-C010Under the corridor route, the death benefit must at all times be at least the applicable percentage of cash surrender value. The percentage uses attained age at the beginning of the contract year and decreases ratably for each full year within the statutory bands reproduced immediately below.S003, §7702(d)(1)–(2); age rules in S014. These are qualification ratios, not income-tax rates or borrowing limits.
R036-P1-C011Except for the corridor calculation, §7702’s general assumptions deem death and qualified additional benefits nonincreasing, maturity between insured ages 95 and 100, death benefits continuing to that deemed maturity, and endowment benefits—including maturity cash surrender value—not exceeding the least death benefit. Specified death-benefit increases may be recognized to preserve the excess over cash surrender value; the cash-value-accumulation alternative requires the stated net-level-reserve test and premium period not ending before age 95.S003, §7702(e)(1), (e)(2)(A)–(B).
R036-P1-C012A separate burial/funeral qualification rule permits specified increases for cash-value-accumulation testing only if initial death benefit is at most $5,000, maximum death benefit at most $25,000, annual fixed predetermined increase is at most 10% of initial benefit or 8% of preceding-year benefit, and the purchase is for the specified burial/prearranged-funeral expenses. Initial death benefit aggregates all contracts issued to the same owner. This rule is excluded from the MEC seven-pay computational cross-reference.S003, §7702(e)(2)(C); S002, §7702A(c)(1)(B). The burial-increase amendment applies to contracts entered into after October 22, 1986, per S003’s note.
R036-P1-C013§7702 “premiums paid” is its own measure: premiums less specified nontaxable §72(e) amounts, specified excess-premium distributions, and other amounts prescribed by regulations. A premium portion returned with interest to comply with the guideline requirement within 60 days after the contract year reduces premiums for that year, excluding the interest; the returned interest is income.S003, §7702(f)(1)(A)–(C). This is not automatically the same measure as §72 investment or §7702A “amount paid.”
R036-P1-C014A premium otherwise exceeding the guideline limit is disregarded for that limit only to the extent necessary to prevent termination through the end of the contract year, and only if the contract has no cash surrender value at the end of the extension period.S003, §7702(f)(6). This is not a general excess-premium permission or loan exclusion.
R036-P1-C015An unreflected change in benefits or other terms requires proper adjustments in future §7702 determinations. A §7702 adjustment and a §7702A material change are related inquiries governed by different text.S003, §7702(f)(7)(A); compare S002, §7702A(c)(3).
R036-P1-C016If an unreflected change reduces benefits during the 15-year period beginning on issue, and a cash distribution results, §72 applies without §72(e)(5) up to the applicable recapture ceiling. Thus a qualifying contract outside the MEC rules can have a distribution for which the ordinary §72(e)(5) treatment is displaced.S003, §7702(f)(7)(B). The ceiling is not itself a declaration that its entire amount is taxable. uscode.house.gov
R036-P1-C017For a cash-value-accumulation contract and a reduction within the first five years, the recapture ceiling is the excess of cash surrender value immediately before reduction over the net single premium immediately afterward.S003, §7702(f)(7)(C)(i).
R036-P1-C018For a guideline-premium contract and a reduction within the first five years, the ceiling is the greater of: premiums before reduction exceeding the adjusted guideline limit; or cash surrender value before reduction exceeding the post-reduction cash-value corridor.S003, §7702(f)(7)(C)(ii)(I)–(II).
R036-P1-C019For a reduction after the first five years but within the first fifteen, the ceiling is the excess of pre-reduction cash surrender value over the post-reduction corridor, whether or not the contract otherwise uses that corridor test.S003, §7702(f)(7)(D).
R036-P1-C020The benefit-reduction rule also addresses anticipatory distributions. A distribution reducing cash surrender value and made within two years before a benefit reduction is statutorily treated as anticipatory; the ceiling provisions require appropriate adjustments.S003, §7702(f)(7)(E), including its regulatory direction.
R036-P1-C021Qualification failure is not automatically cured. The Secretary may waive failure only if the taxpayer establishes reasonable error and reasonable remedial steps to the Secretary’s satisfaction.S003, §7702(f)(8). No waiver, closing agreement, or request is assumed or pursued.
R036-P1-C022Variable contracts require additional classification checks. §7702 testing occurs whenever death benefits change and at least once each 12-month period. §817 defines variable contracts and imposes a diversification condition, subject to its exceptions and regulatory rules. A “variable life” label alone does not establish qualification.S003, §7702(f)(9); S010, §817(d), (h). Detailed diversification application remains partial because §1.817-5 and actual investments are outside this completed reading.
R036-P1-C023A contract that is life insurance under applicable law but fails §7702(a) can produce annual ordinary income under §7702(g). The statutory annual measure is the excess of the increase in net surrender value plus the cost of protection over premiums paid. Protection cost is the lesser of the specified regulatory uniform-premium measure, using five-year age brackets, or stated mortality charge.S003, §7702(g)(1)(A), (B), (D). No annual amount established.
R036-P1-C024If such a contract ceases to qualify during a year, income on the contract for all prior taxable years is treated as received or accrued in the cessation year under the statutory catch-up rule.S003, §7702(g)(1)(C). This is a qualification-failure rule, not a universal lapse or loan-balance rule.
R036-P1-C025For a state-law life contract failing §7702(a), only death proceeds exceeding net surrender value receive the specified deemed-life-insurance treatment under §7702(g)(2). The contract nevertheless remains an insurance contract for the Code under (g)(3). Failure does not automatically make it a MEC or an ordinary annuity.S003, §7702(g)(2)–(3). Full beneficiary treatment remains unestablished.
R036-P1-C026Section 7702 extends its qualification/failure rules to applicable-law endowment contracts and separately defines qualifying endowment contracts for the Code. Section 72 also includes certain face-amount certificates issued after December 31, 1954 within its endowment-contract terminology. These provisions prevent classification solely from a product title.S003, §7702(h); S001, §72(l). The incorporated securities-law certificate definition was not needed to classify an actual instrument and was not independently developed.
R036-P1-C027The applicable-law limb of §7702(a) is waived for the specified church-provided death-benefit arrangements for employees and beneficiaries, directly or through the specified organizations. The other federal qualification requirements are not thereby universally waived.S003, §7702(j)(1)–(3). No employment, church, or organizational facts supplied; application excluded.
R036-P1-C028The printed §7702(i) qualified-20-pay rule requires at least 20 nondecreasing annual premiums and an existing plan filed before September 28, 1983, on file in the appropriate state. Its text substitutes 3% for 4% in §7702(b)(2). Because the 2020 amendment changed that subsection’s rate wording, a modern application of this legacy cross-reference is not resolved here.S003, §7702(i); P.L. 98-369 §221(d)(3); 2020 amendment notes. Annual rather than monthly excess-interest crediting does not itself defeat the specified pre-1983-plan predicate.
R036-P1-C029Final §1.7702-2 governs attained age for specified §7702 tests: actual birthday age or a consistently used contract age within 12 months of actual age, changing annually. First-to-die contracts use the oldest insured; last-to-die contracts generally use the youngest, with the prescribed youngest-surviving rule when both cash-value and future-mortality terms change at death. It applies to contracts issued after December 31, 2008, or on/after October 1, 2007 using the specified 2001 tables; earlier use is permitted only under its consistency condition.S014, §1.7702-2(a)–(f). This actuarial insured-age rule does not establish the taxpayer-age exception under §72(v).
R036-P1-C030Section 7702 generally applies to contracts issued after December 31, 1984, in taxable years ending afterward. It also reaches specified increasing-death-benefit contracts issued after June 30, 1984 with funding faster than ten-year level premiums, subject to C031–C032. For a master contract, the relevant issue date for an insured is first coverage.S003, P.L. 98-369 §221(d)(1), (2)(A), (5).
R036-P1-C031The early-1984 application has three alternative exceptions: a contract meeting the specified §101(f) test; a nonflexible-premium contract meeting the modified §7702 test using 3% and the specified latest-maturity/20-year/age-95 assumption; or the specified periodically adjusted level-premium arrangement using at least 3%, with a comparable death-benefit adjustment allowed at the insured’s option.S003, P.L. 98-369 §221(d)(2)(B)(i)–(iii). These are historical predicates, not a blanket pre-1985 exemption.
R036-P1-C032A further 1984 transition substitutes September 30, 1984 for June 30 when the contract meets the specified modified §7702 test, disregards the specified mortality charges and initial excess-interest guarantees in determining guaranteed rates, and never exceeds the prescribed net-single-premium value. That value uses 3%, the specified 1958 tables, and a level death benefit. A flexible-premium contract issued during 1984 that meets §7702 is treated as meeting §101(f).S003, P.L. 98-369 §221(d)(2)(C); §221(b)(3), as added in 1986.
R036-P1-C033Section 101(f)’s pre-1985 flexible-premium category has its own predicates. It concerns premiums not fixed as to both timing and amount, excluding a state-law annuity portion other than a settlement option. Its death-payment condition requires either the guideline-limit/corridor route or the cash-value/net-single-premium route. Its corridor begins at 140% through age 40, decreases one percentage point per later year, and bottoms at 105%. Its guideline assumptions use guaranteed charges and the greater of 6% or guaranteed rates, with 4% for level premiums; its net-single-premium interest floor is 4%, or 3% for issuance before July 1, 1983. It has distinct maturity, benefit-change, qualified-additional-benefit, premium-refund-within-60-days, necessary-premium, and reasonable-error provisions. These historical tests cannot be replaced by a current product label.S006, §101(f)(1)–(3), read completely. Cash value disregards surrender charges and policy loans; net-single-premium mortality uses the specified guaranteed/all-state-table predicate; maturity and endowment assumptions are those in (2)(D), (3)(G). No actual death exclusion or actuarial determination made.
R036-P1-C034The 2017 mortality/table amendments have an effective-date rule for taxable years beginning after December 31, 2017. The accompanying reserve transition and eight-year reserve adjustment concern the specified reserve provisions; they are not a policyholder loan-income spreading rule.S003, amendment/effectiveness notes; S024, P.L. 115-97 §13517(c)(1)–(3).
Source links captured in this table

Captured table 03

Insured attained-age band, beginning of contract year · Applicable percentage, from → to · 10 data rows

Insured attained-age band, beginning of contract yearApplicable percentage, from → to
More than 0, not more than 40250% → 250%
More than 40, not more than 45250% → 215%
More than 45, not more than 50215% → 185%
More than 50, not more than 55185% → 150%
More than 55, not more than 60150% → 130%
More than 60, not more than 65130% → 120%
More than 65, not more than 70120% → 115%
More than 70, not more than 75115% → 105%
More than 75, not more than 90105% → 105%
More than 90, not more than 95105% → 100%

Captured table 04

Claim ID · Supported proposition and consequential conditions · Exact authority and scope · 18 data rows

Claim IDSupported proposition and consequential conditionsExact authority and scope
R036-P1-C035A modified endowment contract—MEC—must first meet §7702. It is a contract entered into on or after June 21, 1988 that fails the seven-pay test, or a qualifying contract received in exchange for such a MEC or a successor exchange contract. Failure of §7702 is not the MEC definition.S002, §7702A(a)(1)–(2). uscode.house.gov
R036-P1-C036The seven-pay test fails if, at any time during the first seven contract years, accumulated amount paid exceeds the cumulative net level premiums that would have been paid by then for paid-up future benefits after seven level annual premiums. It is not a comparison only at year-end or only against actual premiums scheduled by the contract.S002, §7702A(b).
R036-P1-C037Seven-pay premiums are determined at issue using §7702(b)(2) and (e), excluding the burial-increase rule in §7702(e)(2)(C). The first-contract-year death benefit is deemed to continue through maturity, disregarding scheduled reductions after the first seven years.S002, §7702A(c)(1). Applicable historical interest assumptions still require the issue-date analysis.
R036-P1-C038A benefit reduction within the first seven contract years requires testing as though originally issued at the reduced level. A reduction attributable to nonpayment of premiums is disregarded for this rule if benefits are reinstated within 90 days after reduction.S002, §7702A(c)(2)(A)–(B). No reinstatement or deadline is established for an actual contract.
R036-P1-C039An unreflected material change in benefits or other terms makes the contract a new contract, for §7702A, on the day the change takes effect. Seven-pay testing must make appropriate adjustments for cash surrender value under the contract.S002, §7702A(c)(3)(A)(i)–(ii).
R036-P1-C040Material changes include death-benefit increases and increases/additions of qualified additional benefits. The definition excludes increases attributable to premiums necessary to fund the lowest death-benefit/additional-benefit level payable in the first seven years, after the specified §7702(e)(2)(A)–(B) increases, and interest, earnings, or policyholder dividends on those necessary premiums.S002, §7702A(c)(3)(B)(i).
R036-P1-C041A cost-of-living increase is excluded from material-change treatment only to the extent provided in regulations, using an established broad-based index and ratable funding over the remaining required-premium period. The statutory regulatory authorization alone does not establish a particular increase qualifies.S002, §7702A(c)(3)(B)(ii). No applicable regulatory allowance was assumed.
R036-P1-C042If initial death benefit is at most $10,000 and at least seven nondecreasing annual premium payments are required, each statutory seven-pay level premium is increased by $75. For this test, the contract and all contracts previously issued by the same company to the same policyholder are one contract.S002, §7702A(c)(4). This aggregation is not limited to one calendar year.
R036-P1-C043Expenses attributable solely to collection of premiums more frequently than annually can enter seven-pay computation only under rules prescribed by regulation. The statute does not itself provide an unrestricted expense adjustment.S002, §7702A(c)(5).
R036-P1-C044For the specified second-death or simultaneous-death contract, reduction below the lowest death benefit provided during the first seven contract years requires testing as originally issued at the reduced benefit. The reduction clause itself is not limited to reductions occurring during those seven years. This amendment applies to contracts entered into on or after September 14, 1989.S002, §7702A(c)(6); P.L. 101-239 §7647(b).
R036-P1-C045Failure affects distributions in the contract year of failure and later contract years, plus anticipatory distributions under the statutory/regulatory rule. A distribution within two years before failure is deemed anticipatory. Consequently a later failure can affect an earlier distribution; the text does not simply tax every outstanding balance upon reclassification.S002, §7702A(d)(1)–(2), concluding sentence.
R036-P1-C046For seven-pay testing, “amount paid” means premiums less §72(e) amounts that are not included in gross income, determined without the loan/pledge deeming rule in §72(e)(4)(A). This differs from both §72 investment and §7702 premiums paid.S002, §7702A(e)(1)(A).
R036-P1-C047A premium portion returned with interest to comply with the seven-pay test within 60 days after the end of the contract year reduces that year’s premiums, excluding the interest. The returned interest is included in the recipient’s gross income notwithstanding §72(e).S002, §7702A(e)(1)(B)–(C). No actual correction or timely refund established.
R036-P1-C048A contract year is the 12-month period beginning with the first month for which the contract is in effect, and corresponding successive periods. It is not necessarily a calendar year. Other §7702A terms generally take their §7702 meanings.S002, §7702A(e)(2)–(3).
R036-P1-C049The 1988 MEC amendments generally apply to contracts entered into on or after June 21, 1988. The successive-exchange clarification was made effective as part of the 1988 amendments. The 2002 enactment repealed the intervening “old contract” wording in the cash-value adjustment clause as though that amendment had not occurred.S002, P.L. 100-647 §5012(e)(1); P.L. 106-554 §318(a)(3); P.L. 107-147 §416(f).
R036-P1-C050For the historical issue-date transition, a death-benefit increase of more than $150,000 over the benefit in effect on October 20, 1988 invokes the material-change rules in determining post-June 20, 1988 status. This particular trigger does not apply if, as of June 21, 1988, at least seven level annual premiums were required and at least seven are actually made.S002, P.L. 100-647 §5012(e)(2). The exception is not automatically an exception to every other material-change rule.
R036-P1-C051A pre-June 21, 1988 contract is treated as later-entered if a death benefit or qualified additional benefit is increased/added on or after that date without a preexisting unilateral right to obtain it without additional insurability evidence; or if it is converted after June 20, 1988 from term to nonterm coverage, regardless of a prior conversion right.S002, P.L. 100-647 §5012(e)(3)(A)–(B).
R036-P1-C052A narrow historical exchange exception concerned MECs entered into after June 20 and before November 10, 1988, requiring at least seven level annual premiums, exchanged within three months after enactment for seven-pay-compliant life insurance, with an election to recognize gain notwithstanding §1035. It does not establish a presently available general MEC “reset.”S002, P.L. 100-647 §5012(e)(4). No calendar deadline calculated.
Source links captured in this table

Captured table 05

Claim ID · Supported proposition and consequential conditions · Exact authority and scope · 25 data rows

Claim IDSupported proposition and consequential conditionsExact authority and scope
R036-P1-C053Section 72(e) addresses an amount received under an annuity, endowment, or life-insurance contract that is not received as an annuity, and only when another provision of the subtitle does not apply to that amount. A dividend or similar distribution is treated as nonannuity receipt.S001, §72(e)(1)(A)–(B). Classification comes before ordering.
R036-P1-C054For nonannuity life/endowment amounts within §72(e)(5)(C), absent its MEC/regulatory exceptions and other statutory overrides, §72(e)(2)(B)’s income-first allocation and §72(e)(4)(A)’s loan/pledge deeming do not apply. If the post-annuity-starting-date rule does not apply, inclusion is only to the extent the amount exceeds investment in the contract. Thus a genuine policy borrowing is not made a distribution merely by the switched-off deeming rule.S001, §72(e)(5)(A), (C); qualifications C016–C020, C055, C068, C074. This is not a finding that an actual advance is a genuine loan. uscode.house.gov
R036-P1-C055For a MEC, §72(e)(10) overrides the life/endowment exception, applies §72(e)(2)(B) and (4)(A), and substitutes “any person” for “an individual” in the deeming rule. Taxable income still depends on the applicable allocation and exceptions; MEC status does not make every dollar of every loan taxable.S001, §72(e)(10)(A); S002, §7702A(d).
R036-P1-C056In the pre-annuity-starting-date income-first framework, the amount is allocated to income up to the excess, if any, of cash value without surrender charge immediately before receipt over investment then. The balance is allocated to investment. The statute’s own §72 measurement must be used; §7702’s separate definition is not silently substituted.S001, §72(e)(2)(B), (3)(A)–(B). Aggregation under C070 may change the relevant combined measurement.
R036-P1-C057Within that framework, direct or indirect receipt of an amount as a loan under the contract, or assignment, pledge, or agreement to assign/pledge a portion of contract value, causes that amount or portion to be treated as received as a nonannuity amount. The assigned/pledged portion is not automatically the face death benefit or the entire unassigned contract.S001, §72(e)(4)(A)(i)–(ii), with MEC substitution in (e)(10)(A)(ii). A collateral event can matter without delivery of new cash by the insurer.
R036-P1-C058The loan/pledge deeming sentence does not itself apply in determining investment in the contract, except that investment increases by the amount actually included in gross income because of that deeming. Thus neither subtracting the entire deemed loan from investment nor adding the entire loan as a premium follows from this rule.S001, §72(e)(4)(A), final sentence. Actual repayments and later applications of debt require separate characterization; no automatic repayment adjustment is invented.
R036-P1-C059A MEC assignment or pledge is excepted from §72(e)(4)(A) when it is solely to cover the burial/prearranged-funeral expenses referenced by §7702(e)(2)(C)(iii), and maximum death benefit is at most $25,000. The exception is for assignment/pledge; it is not an express exception for every loan. It does not import all the separate initial-benefit/increase limits of C012.S001, §72(e)(10)(B).
R036-P1-C060Section 72(e)(5) also protects the specified pre-August 14, 1982 contract treatment, but investment allocable after August 13, 1982 is treated as from a later contract. Accordingly an annuity comparison cannot simply assume that all old and new investment has identical income-first or loan-deeming treatment.S001, §72(e)(5)(B); P.L. 97-248 §265(c). No retirement-plan renewal transition is imported.
R036-P1-C061Section 72(e)(5)(E) separately covers amounts received on complete surrender, redemption, or maturity, and amounts received in full discharge of the contract obligation in the nature of a refund of consideration. It also switches off §72(e)(2)(A) for those amounts. Section 72(e)(10) overrides (5)(C), not the separate full-surrender text in (5)(E).S001, §72(e)(5)(A), (E), (10)(A); S013, §1.72-11(c)–(d). “Full discharge” here is not a blanket rule for cancellation of a borrower’s debt.
R036-P1-C062Rev. Rul. 2009-13 applies §72(e)(5) to a qualifying life contract’s surrender, treats the excess over investment as ordinary income, and does not reduce surrender investment by cost-of-insurance charges in its stated situation. Its surrender facts include no policy loans or prior distributions, so it does not establish a universal indebted-lapse calculation.S016, Situation 1 analysis, printed pp. 3–5 / PDF indexes 2–4; holding 1, printed p. 11 / index 10.
R036-P1-C063Rev. Rul. 2009-13 must be read with Rev. Rul. 2020-05’s modifications concerning the later statutory adjusted-basis rule. Using the original ruling as wholly unchanged would misstate its status. The separate sale analyses are not a foundation for this component.S017, printed pp. 4–6 / indexes 3–5, modifying S016; stated effective date transactions on/after August 26, 2009.
R036-P1-C064Publication 525’s cash-surrender explanation subtracts unrepaid loans not previously included in income in its simplified cost description. This supports the need to reconcile debt and cash in a surrender computation. It does not authorize simultaneously adding the same debt to gross proceeds and subtracting it again from statutory investment, or reducing §72(e)(6) investment every time a non-MEC loan originates.S018, “Surrender of policy for cash,” read with S001, §72(e)(4)(A), (5)(E), (6). The anti-double-counting conclusion is an analytical reconciliation, not an additional statutory formula.
R036-P1-C065The labels “lapse,” “termination,” “discharge,” and “write-off” do not by themselves identify a receipt or its measure. If an event constitutes a complete surrender or refund, C061 controls its ordering; if a MEC loan/pledge is deemed received, C055–C058 control. Whether a particular event applied value to debt, discharged a contractual obligation, or produced another legally relevant amount remains fact-dependent.S001, §72(e)(4), (5)(E), (6), (10); S018. Partial: the selected noncase authorities do not establish one exhaustive treatment for every zero-cash lapse, interest capitalization, or debt discharge.
R036-P1-C066Cash originally advanced, an outstanding principal balance, accrued interest, newly capitalized interest, a new advance, repayment, and later contract settlement are distinct events or measurements. The read §72 provisions do not justify treating every unchanged balance as a new annual receipt or importing §72(p)’s plan-loan rules for interest, renewal, cure, or repayment.S001, §72(e)(4)(A), (6), (10); boundary (p)(1), (5). Treatment of a particular capitalization or refinancing remains unresolved without its legal character and pertinent published authority.
R036-P1-C067A dividend retained by the insurer as a premium or other consideration is not included under §72(e)(2)(B)(i) to that extent. A cash dividend and a retained-premium dividend therefore require different facts and cannot automatically be treated as either a loan or newly paid outside cash.S001, §72(e)(1)(B), (4)(B), (6).
R036-P1-C068A charge against annuity cash value or life-insurance cash surrender value for coverage under a qualified long-term-care contract that is part of or a rider on the contract is not included in income under §72(e)(11), notwithstanding the specified ordinary/MEC rules. It reduces investment, but not below zero. The 2006 provision generally applies to contracts issued after December 31, 1996, for taxable years beginning after December 31, 2009.S001, §72(e)(11); P.L. 109-280 §844(g)(1). No rider qualification assumed.
R036-P1-C069Qualified long-term-care status requires the separate §7702B predicates, including qualified services, the specified Medicare coordination, guaranteed renewability, restrictions on cash/borrowing/assignment values, premium-refund treatment, and consumer-protection requirements. Section 7702B(e) separates the rider portion and denies a §213 deduction for the specified value-funded charge. Issuance of a qualified rider, or adding provisions needed to conform another long-term-care rider, is not a modification/material change for §§101(f), 7702, or 7702A under the enactment note.S011, §7702B(b), (c), (e), (g); P.L. 104-191 §321(f)(4). Incorporated qualification standards and actual eligibility remain unestablished.
R036-P1-C070For §72(e) inclusion, all MECs issued by the same company to the same policyholder during a calendar year are one MEC; annuities have a corresponding aggregation rule. The rule excludes §72(e)(5)(D) contracts. Additional anti-abuse rules require regulations; “all related contracts everywhere” is not the text. For annuities, the 1988 subsection-(d) amendments apply to contracts entered into after October 21, 1988.S001, §72(e)(12)(A)–(B); S002, P.L. 100-647 §5012(e)(5); 1989 calendar-year amendment note.
R036-P1-C071An individual’s transfer of an annuity without full and adequate consideration has a separate deemed-receipt rule for cash surrender value exceeding investment, with the §1041(a) exception and a transferee investment increase for the amount included. This is not automatically the rule for a collateral assignment of a life contract.S001, §72(e)(4)(C)(i)–(iii). Full gift/divorce analysis excluded.
R036-P1-C072For a transfer for value whose transferee basis is not determined by reference to the transferor’s basis, §72(g) uses actual consideration plus subsequent transferee premiums/consideration, specified transferee prior receipts, and the transferee’s annuity starting date. “Transferee” includes its beneficiary or estate. A pledge alone does not establish all these transfer-for-value predicates.S001, §72(g)(1)–(3), concluding sentence.
R036-P1-C073Amounts actually received as an annuity are governed by §72(a)–(c), including the investment/expected-return framework and annuity-starting-date definition, rather than automatically by nonannuity withdrawal ordering. Qualifying partial annuitization for ten years or more or one or more lives creates a separate portion, pro rata investment allocation, and separate starting date; the 2010 amendment applies to taxable years beginning after December 31, 2010.S001, §72(a)–(c), P.L. 111-240 §2113(b); S012, §1.72-2(b). Historical annuity-starting-date rules and actuarial tables are not calculated or certified here.
R036-P1-C074A nonannuity amount received on or after the annuity starting date is generally included under §72(e)(2)(A), subject to the applicable statutory exceptions, including the full-refund/surrender rule in C061. The pre-start loan/ordering analysis cannot simply be copied to every post-start event.S001, §72(e)(2)(A), (5)(A), (5)(E).
R036-P1-C075If a contract provides a full-discharge lump sum with an annuity option, the option is exercised within 60 days after the lump sum first becomes payable, and some or all would otherwise be included under §72(e)(1), §72(h) prevents inclusion merely when that lump sum first becomes payable.S001, §72(h)(1)–(3). No exercise or deadline determined.
R036-P1-C076Interest payments on an amount held under an agreement to pay interest are income notwithstanding other §72 provisions. That recipient interest is distinct from interest charged on a policy borrowing.S001, §72(j).
R036-P1-C077Qualified-plan/IRA contracts have expressly separate §72(e)(5)(D)/(8) treatment. Section 72(p)(5) treats a loan, assignment, or pledge of a contract purchased under a qualified employer plan as a plan loan. These boundaries prevent importing the independent-policy analysis into a retirement arrangement or importing retirement-plan loan limits into this component.S001, §72(e)(5)(D), (8), (p)(1), (5). The separate retirement-plan-loan report was not used or regenerated.
Source links captured in this table

Captured table 06

Claim ID · Supported proposition and consequential conditions · Exact authority and scope · 9 data rows

Claim IDSupported proposition and consequential conditionsExact authority and scope
R036-P1-C078If a taxpayer receives an amount under a MEC, §72(v)(1) increases tax for the receipt year by 10% of the portion included in gross income, subject to its exceptions. The base is not automatically gross cash, original borrowing, death benefit, or outstanding principal.S001, §72(v)(1), read with (e)(4)(A), (10) for deemed receipts. uscode.house.gov
R036-P1-C079The age exception applies to a distribution made on or after the date the taxpayer attains 59½. The insured’s age, contract age, or another role’s age does not establish this predicate.S001, §72(v)(2)(A).
R036-P1-C080The disability exception requires the distribution to be attributable to the taxpayer’s becoming disabled within §72(m)(7): inability to engage in any substantial gainful activity because of a medically determinable physical or mental impairment expected to result in death or to be long-continued and indefinite, with proof in the form and manner required by the Secretary.S001, §72(v)(2)(B), (m)(7). No disability or medical fact inferred.
R036-P1-C081The periodic-payment exception requires a distribution to be part of substantially equal periodic payments, at least annually, for the taxpayer’s life/life expectancy or the joint lives/joint life expectancies of the taxpayer and beneficiary. A single withdrawal, a repayment schedule, or the insurer’s installment label does not establish this exception.S001, §72(v)(2)(C). No payment method, life-expectancy calculation, or modification conclusion supplied.
R036-P1-C082The retrieved §72(v)(2) contains the three exceptions in C079–C081. It does not contain §72(q)’s separate death, immediate-annuity, pre-1982-investment, or other listed exceptions. Nor does a reporting code establish a new statutory exception. This does not imply that a death payment is necessarily taxable; §101 must first be addressed.S001, §72(v)(2), compared with (q)(2); S006, §101(a).
R036-P1-C083For an annuity, §72(q) has its own 10%-of-includible-amount rule and exceptions: taxpayer age 59½; holder’s death or specified primary-annuitant death; disability; qualifying periodic payments; specified qualified arrangements; pre-August 14, 1982 investment; a qualifying funding asset; amounts governed by §72(t); an immediate annuity; and the specified employer-purchased contract following plan termination. These are annuity boundaries, not MEC exceptions.S001, §72(q)(1)–(2)(A)–(J), (s)(6)(B), (u)(4). An immediate annuity requires a single premium/consideration, starting within one year, and substantially equal payments at least annually.
R036-P1-C084Section 72(q)(3) expressly addresses subsequent modification of qualifying periodic payments, other than death/disability, before age 59½ or within the specified five-year period after payments begin, with recapture and deferral interest. Its §1035-exchange exception requires combined distributions to continue satisfying the periodic-payment requirement. The relevant exchange amendment applies to exchanges after December 31, 2023, with an express no-inference rule for earlier law.S001, §72(q)(3)(A)–(B); P.L. 117-328 div. T §323(e). This annuity recapture text is not automatically imported into §72(v).
R036-P1-C085An annuity held by a nonnatural person can fall under §72(u)’s current ordinary-income regime rather than ordinary annuity deferral, subject to the natural-person-agent rule and the express estate-at-death, qualified-arrangement, qualified-funding-asset, employer-termination-contract, and immediate-annuity exceptions. Its enactment applicability concerns contributions after February 28, 1986.S001, §72(u)(1)–(4); P.L. 99-514 §1135(b). No entity, ownership, or annual-income computation established.
R036-P1-C086Unresolved authority issue: the 2026 Form 1099-R code notes refer to modifying substantially equal periodic payments under §72(q), (v), or (t) before five years, even after age 59½. The retrieved §72(v) has no express recapture paragraph corresponding to §72(q)(3). The instruction supports its stated reporting direction; it does not, by itself, establish the substantive §72(v) recapture base, interest, or legal authority.S019, Table 1, code 1 and code 7 notes; S001, §72(v), compared with (q)(3). No independent published authority resolving this issue was established in this investigation. Internal Revenue Service +1
Source links captured in this table

Captured table 07

Claim ID · Supported proposition and consequential conditions · Exact authority and scope · 14 data rows

Claim IDSupported proposition and consequential conditionsExact authority and scope
R036-P1-C087Section 264(a)(2) denies deductions for amounts paid/accrued on debt incurred or continued to purchase or carry a single-premium life, endowment, or annuity contract. For this purpose, substantially all premiums within four years of purchase, or a post-March 1, 1954 deposit funding a substantial number of future premiums, can make a contract single-premium. The annuity application of (a)(2) is limited to contracts purchased after March 1, 1954.S004, §264(a)(2), concluding applicability sentence, (c)(1)–(2). uscode.house.gov
R036-P1-C088For contracts purchased after August 6, 1963, §264(a)(3) addresses purchase/carry debt under a plan contemplating systematic direct or indirect borrowing of cash-value increases, from the insurer or otherwise, excluding single-premium contracts already covered by (a)(2).S004, §264(a)(3), concluding applicability sentence.
R036-P1-C089The four §264(d) exceptions apply to (a)(3): no debt financing of any part of four annual premiums due during the specified seven-year period; otherwise-disallowed annual paid/accrued amounts no more than $100; debt arising from an unforeseen substantial income loss or financial-obligation increase; or trade/business debt. A substantial premium increase restarts that seven-year period when the first increased premium is paid.S004, §264(d)(1)–(4), concluding sentence. These exceptions do not erase (a)(2), (a)(4), or §163.
R036-P1-C090Section 264(a)(4) separately denies interest deductions on indebtedness with respect to taxpayer-owned life policies covering any individual, or taxpayer-owned endowment/annuity contracts covering any individual, subject to subsection (e). Its purchase-date boundary is after June 20, 1986. It is not conditioned on MEC status.S004, §264(a)(4), concluding applicability sentence; P.L. 99-514 §1003(c).
R036-P1-C091The key-person exception removes the (a)(4) bar only to the extent aggregate relevant indebtedness for policies/contracts covering the key individual does not exceed $50,000. This is neither a tax-free loan allowance nor a contractual borrowing ceiling. Other deduction restrictions remain.S004, §264(e)(1).
R036-P1-C092A key person is an officer or 20-percent owner, with the permitted number capped at the greater of five or the lesser of 5% of officers/employees and twenty. Corporate ownership uses direct stock or voting ownership; other entities use capital/profits interests. Controlled-group aggregation applies to the stated ownership test and $50,000 limit, with allocation as prescribed.S004, §264(e)(3)–(5). Incorporated §§52 and 414 business-group application remains outside the completed component.
R036-P1-C093The key-person/pre-1986 deduction allowance is further capped for months beginning after December 31, 1995 by the monthly corporate-bond benchmark specified in §264(e)(2). For contracts purchased on/before June 20, 1986, fixed-rate contracts use the purchase-month benchmark; variable-rate contracts use the third month before the applicable period. That period is normally successive twelve-month periods, with the statutory shorter-period election, historical 90-day election requirement, and consent-to-revoke condition.S004, §264(e)(2)(A)–(B). No benchmark lookup, historical election, interest rate, or deduction amount established.
R036-P1-C094Section 264(f) has a separate proportional interest-disallowance regime based on average unborrowed policy cash values for specified post-June 8, 1997 contracts relative to the stated asset denominator. Its unborrowed-value measure generally subtracts loans from cash surrender value determined without surrender charges, with an alternative valuation rule if that does not reasonably approximate actual value.S004, §264(f)(1)–(3), (7). This is a third distinct value measure; no averaging convention or business deduction is computed.
R036-P1-C095Section 264(f)’s exceptions and coordination matter: specified single-insured business contracts, the owner-and-spouse allowance, §72(u) annuities, qualifying separate master-contract coverage, natural-person ownership, and insurance-company exclusions. The natural-person exception has a business-beneficiary override, with sole-proprietorship/employee-business exclusions and a benefit cap. Partnerships/S corporations are tested at entity level; controlled-group aggregation and coordination with §§264(a), 265, and 263A apply.S004, §264(f)(4)–(8), read completely. Full incorporated business-tax analysis remains excluded.
R036-P1-C096Premium deduction and interest deduction are separate questions. Section 264(a)(1) denies premiums where the taxpayer is directly or indirectly a beneficiary, subject to the specified annuity exceptions in (b). A premium’s inclusion in §72 investment does not itself create a deduction.S004, §264(a)(1), (b); S001, §72(e)(6).
R036-P1-C097The 1996 amendments generally apply to interest paid/accrued after October 13, 1995, with a historical transition ending before January 1, 1999 for specified earlier debt. The 1997 amendments generally apply to contracts issued after June 8, 1997, in taxable years ending afterward; material death-benefit increases or other material changes can make a contract new for that transition, and added lives under a master contract have the stated separate treatment.S004, P.L. 104-191 §501(c); S006, P.L. 105-34 §1084(d). Historical transition qualification requires the original debt dates, specified interest cap, aggregation, insured-count limit, and annual percentages; none is applied to current interest.
R036-P1-C098The historical four-year income-spreading provision concerns otherwise-taxable amounts under specified §264(a)(4) contracts on complete surrender/redemption/maturity, or a qualifying full-discharge refund, during 1996, 1997, or 1998. It is not a general current surrender or lapse spreading rule. The associated historical premium-test provision also has its own express lapse predicate and former-subsection references.S004, P.L. 104-191 §501(d)(1)–(2), as amended. No present relief inferred from the note’s continued display.
R036-P1-C099Even if a §264 bar does not apply, §163 remains a separate gate. Section 163(a)’s general interest rule is limited by §163(h)’s prohibition of personal-interest deductions for noncorporate taxpayers and applicable exceptions. An exception to a disallowance is not affirmative proof of deductibility.S005, §163(a), (h)(1)–(2); S004. Full deduction tracing and all §163 exceptions remain held.
R036-P1-C100These tax provisions establish inclusion, exclusion, and deduction conditions. They do not supply a contractual right to borrow, an insurer’s repayment terms, protection against lapse, or a suitability recommendation. A deduction limitation is not a prohibition on borrowing.Scope of S001, S003–S005; contractual/insurance-law analysis expressly excluded by the parent holds.
Source links captured in this table

Captured table 08

Claim ID · Supported proposition and consequential conditions · Exact authority and scope · 5 data rows

Claim IDSupported proposition and consequential conditionsExact authority and scope
R036-P1-C101Section 1035 permits specified exchanges: life to life/endowment/annuity/qualified long-term-care; endowment to qualifying endowment with payments beginning no later, annuity, or qualified long-term-care; annuity to annuity or qualified long-term-care; qualified long-term-care to qualified long-term-care. It does not list annuity-to-life as a permitted direction. Section-specific definitions and the foreign-person limitation remain relevant.S007, §1035(a)–(c). No replacement transaction recommended or assumed.
R036-P1-C102The read final regulation requires the same insured for insurance exchanges and the same obligee or obligees for annuity exchanges. An ownership/insured change is not automatically a qualifying exchange merely because another contract is acquired.S015, §1.1035-1; current statutory categories in S007 control later additions. Original regulatory issuance-date gap remains recorded.
R036-P1-C103Money, other property, and liability assumption can prevent complete nonrecognition. Through §1035(d), §1031(b)–(d) supplies gain-recognition, no-loss, basis, and liability-as-money rules. The incorporated §357(d) definition treats recourse and nonrecourse liabilities differently and requires the specified agreement, expected-payment, collateral, and allocation facts.S007, §1035(d); S008, §1031(b)–(d); S009, §357(d)(1)–(3). No automatic conclusion that every loan balance is taxable “boot.”
R036-P1-C104A qualifying §1035 exchange generally carries the prescribed adjusted investment/basis framework rather than resetting everything to a new cash premium. Separately, §7702A(a)(2) preserves MEC classification through successive exchanges. Income nonrecognition and MEC status are different questions.S007, §1035(d); S008, §1031(d); S002, §7702A(a)(2).
R036-P1-C105Section 101’s death-payment exclusion is subject to its own exceptions and limits, including transfer-for-value/reportable-sale rules and separate interest treatment. A MEC still satisfies §7702 by definition, so MEC status alone does not establish the death benefit’s tax result. No beneficiary, death, ownership, transfer, or employer facts are supplied.S006, §101(a), (c), (d), (f); S002, §7702A(a); S003, §7702(g)(2). Full death-benefit, estate, gift, and employment analysis remains held.

Captured table 09

Claim ID · Supported proposition and consequential conditions · Exact authority and scope · 8 data rows

Claim IDSupported proposition and consequential conditionsExact authority and scope
R036-P1-C106Section 6047(d) authorizes/requires the specified issuer reporting for contracts from which designated distributions may be made, as prescribed. Its $10 aggregate annual threshold is a reporting provision, not an income exclusion. Section 6047(g) coordinates with information required under §6050Y.S021, §6047(d)(1)–(2), (g). Actual filer/event status and full reporting rules remain unestablished.
R036-P1-C107For §3405 withholding, “commercial annuity” expressly includes a life-insurance or endowment contract issued by a state-licensed insurance company. That withholding definition does not reclassify every life contract as an annuity for §72’s substantive treatment. Designated distributions, exclusions, payor responsibility, and the cash/property withholding limitation require their own predicates.S022, §3405(d), (e)(1), (6), (8). No withholding election, rate, or obligation determined.
R036-P1-C108Amounts withheld under chapter 24 are credited under §31(a); withholding is not itself the final income-tax liability.S020, §31(a)(1)–(2).
R036-P1-C109The inspected 2026 instructions identify box 1 as gross distribution, 2a as taxable amount, 2b as relevant determination/distribution checkboxes, 4 as federal income tax withheld, 5 as the specified contributions/premiums recovered, and 7a as distribution codes. The 2026 renumbering must not be silently replaced by an older box-number convention.S019, “What’s New,” and instructions for those boxes. This describes instructions actually read, not a completed form.
R036-P1-C110The instructions direct reporting of matured/redeemed insurance and annuity payments, but state that a life-insurance surrender need not be reported on Form 1099-R when it is reasonable to believe none of the payment is includible. This conditional instruction does not establish that an actual surrender occurred or that any actual payer met the belief predicate.S019, “Life insurance, annuity, and endowment contracts.”
R036-P1-C111A qualifying §1035 exchange can be reportable despite nonrecognition. The instructions separately address loan cancellation or other property and provide the stated within-company exception where the transaction is solely an exchange, no designated distribution occurs, and adequate basis records are maintained.S019, “Section 1035 exchange.” This reporting exception is not the substantive qualification test.
R036-P1-C112In the inspected code table, L is for deemed distributions under §72(p), not every policy loan. Code 6 addresses §1035 exchanges; code 7 includes the stated life/annuity/endowment and failed-§7702 reporting; W addresses qualifying §72(e)(11) long-term-care charges. A code does not prove qualification, income amount, or an additional-tax exception.S019, Table 1, codes 6, 7, L, W; see unresolved code-note issue C086. Internal Revenue Service
R036-P1-C113No actual information return, withholding entry, payer determination, or tax return has been supplied. Therefore this investigation establishes conditional reporting functions only; it does not establish an actual filing duty, taxable box amount, withholding liability, or final tax bill.Application limits of S019–S022, and the user’s held facts.
Source links captured in this table

Captured table 10

Question · Qualifying life contract outside MEC treatment · MEC · 9 data rows

QuestionQualifying life contract outside MEC treatmentMECAnnuity or other separately governed contractUnknown/nonqualifying contract
Classification prerequisiteApplicable version of §7702 or historical framework must be satisfied; MEC status must separately be excluded.Must meet §7702 and satisfy §7702A’s failure/exchange definition.Contract and payment classification must be established; qualified arrangements and §72(u) are separate boundaries.No favorable classification is presumed. A state-law life contract failing §7702 can trigger §7702(g).
Ordinary pre-start cash withdrawal§72(e)(5) generally recovers investment before inclusion, subject to benefit-reduction and other overrides.§72(e)(2)(B)/(3) generally allocates income first.Generally the pre-start income-first framework, but old-investment and qualified-arrangement exceptions matter.No ordering rule selected until legal classification is established.
Loan under contract§72(e)(5)(C) generally turns off §72(e)(4)(A) deeming; actual loan character remains necessary.Direct/indirect loan receipt is deemed nonannuity receipt, with income allocation and the specific investment increase.§72(e)(4)(A) can apply to an individual within its framework; grandfathered investment and other exceptions matter.No blanket borrowing exclusion or deemed-distribution rule established.
Assignment/pledge/agreementThe same §72(e)(5)(C) switch-off generally applies; an outright transfer remains a different inquiry.Assigned/pledged value can be deemed received; narrow burial/funeral exception may apply.Loan/pledge deeming and the distinct annuity transfer-without-consideration rule must not be confused.Actual legal character, amount, and applicable regime remain unknown.
Complete surrender/refund/maturity§72(e)(5)(E) governs qualifying complete events, with investment recovery.The separate full-event rule must still be considered; MEC status alone does not erase (5)(E).Same full-event provision can apply; regular annuity payments have a different recovery regime.Event classification and any §7702(g) effects must first be resolved.
Lapse/termination with debtNo universal result from the label; determine the legal receipt/settlement and reconcile debt, value, investment, and prior treatment.Same event inquiry, plus prior deemed receipts, basis increases, aggregation, and MEC timing.Applicable annuity/other regime and actual event required.No amount, write-off, cancellation-income treatment, or absence of income inferred.
Additional tax§72(v) does not apply merely because it is life insurance.§72(v): 10% of includible amount unless its own exception applies.§72(q) is separate; qualified arrangements have separately held rules.No additional-tax provision or exception selected from labels alone.
Interest deduction§§264 and 163 apply independently of favorable borrowing treatment.Same separate deduction inquiry; MEC status is not the sole test.Relevant §264/§163 provisions and contract-date boundaries remain separate.No deduction inferred.
ReportingReporting can depend on a later distribution even if an earlier genuine borrowing was not deemed received.A deemed receipt can matter without equivalent cash delivery.Tax-free exchanges and other events may still be reportable.A form or code cannot cure missing substantive classification.

Captured table 11

Branch · Supported conditional rule and exact claim/source links · Missing evidence, held rather than requested · 20 data rows

BranchSupported conditional rule and exact claim/source linksMissing evidence, held rather than requestedAdverse inference to avoidNext permissible public-law inquiry
B01 — Contract qualification unknownAnswered rule: §7702 requires applicable-law status plus the selected federal test; failure can invoke §7702(g). C002, C006–C025; S003 §§7702(a)–(g).Applicable qualification regime, selected test, compliance history, any failure or waiver.Marketing category establishes federal life-insurance status; failure means MEC.Read any further published Treasury qualification rule implicated by the identified legal category; no insurer or policy search.
B02 — Life contract versus annuityAnswered boundary: §72 distinguishes the contract from whether a payment is received as an annuity; qualified arrangements and §72(u) are separate. C053, C073–C077, C083–C085; S001, S012.Contract classification, payment character, ownership category, annuity starting status.Every insurer-issued product, or every installment payment, gets life-policy loan treatment.Examine the relevant portions of final §1.72 regulations and statutory category definitions only.
B03 — MEC status unknownAnswered rule: §7702A requires §7702 qualification plus seven-pay failure or the exchange rule. C035–C048; S002 §7702A(a)–(e).Seven-pay determination, amount-paid history, benefit history, prior exchange status.All permanent policies are MECs, or an unexplained label proves non-MEC status.Further published generic guidance on the particular seven-pay computational issue; no private ruling/request.
B04 — Issue/change/exchange date unknownAnswered transitions; partial legacy cross-reference: issue, conversion, change, and exchange dates can select different statutory rules. C007, C028–C034, C044, C049–C052; S002–S003, S006, S014, S024.Relevant legal dates and character of changes; historical unilateral rights.A single original issue date preserves every grandfather rule indefinitely.Read published guidance resolving the relevant transition, including the §7702(i) cross-reference if that category becomes relevant.
B05 — Investment unknownAnswered rule: premiums/consideration less prior excluded amounts, with particular deemed-receipt and rider adjustments. C005, C058, C068, C072; S001 §72(e)(4), (6), (11), (g).Premium/consideration history, prior recoveries, taxable deemed receipts, transfer and rider adjustments.Cash value, death benefit, premium total, or debt balance automatically equals investment.Published §72 guidance on the particular adjustment; keep investment and adjusted sale basis separate.
B06 — Loan versus distributionAnswered conditional rule: actual loan character matters; the non-MEC switch-off and MEC switch-on differ. C053–C058; S001 §72(e)(1)–(6), (10).Legal character of advance, direct/indirect receipt, pre/post-annuity-start status.Any cash delivery is taxable income, or every item called a loan is excluded.Published interpretation of the precise generic transaction category under §72(e).
B07 — Collateral assignment/pledgeAnswered rule: an agreement to assign/pledge a portion can trigger MEC deeming; narrow burial exception is separate. C057, C059, C071–C072; S001 §72(e)(4), (10)(B), (g).Portion affected, collateral versus ownership transfer, agreement, purpose, maximum benefit.No cash means no possible receipt; every assignment is a sale; entire face amount is deemed received.Published final rules or interpretations distinguishing collateral assignment, outright transfer, and the statutory burial exception.
B08 — Outstanding debt and interest unknownPartial: distinguish principal, accrued/capitalized interest, new advances, repayment, and later application of value. C058, C065–C066; S001, S018.Debt composition, prior taxation, capitalization mechanics, later settlement character.All outstanding debt is newly taxable each year; retirement-plan accrued-interest instructions govern policy loans.Search only published Treasury/IRS guidance on capitalization, repayment, and repeated deemed receipts under §72(e).
B09 — Surrender/lapse/termination unknownAnswered surrender rule; partial exhaustive lapse treatment: complete events invoke §72(e)(5)(E); labels alone do not establish a receipt. C061–C065; S001, S013, S016–S018.Actual event, proceeds/value application, surviving rights, discharged obligation, prior basis recovery.Every lapse produces the same tax, or a lender necessarily writes off debt.Published generic guidance specifically addressing the relevant noncash termination mechanism; no case-record inquiry.
B10 — Gross proceeds versus cash receivedAnswered distinction; partial event measure: reconcile gross contract receipt, debt application, charges, withholding, and net cash without double counting. C003–C005, C056, C064, C109; S001, S003, S018–S019.Gross settlement components and prior taxable/excluded amounts.Zero cash proves zero income; debt is counted both in gross proceeds and again as a basis reduction.Published guidance identifying the legally appropriate gross/net convention for the event.
B11 — Aggregation/related contracts unknownAnswered statutory rules: calendar-year MEC/annuity grouping differs from all-prior-contract small-benefit grouping and same-owner burial grouping. C012, C042, C070; S001–S003.Same-company, same-policyholder/owner, issue-calendar-year, prior-contract, and excluded-plan predicates.Every related contract aggregates, or none does; “contract year” means calendar year.Published anti-abuse regulations or interpretations for the precise aggregation provision.
B12 — Additional-tax exception unknownAnswered statutory exceptions; partial modification issue: §72(v) taxes the includible portion, with taxpayer-age, disability, or qualifying periodic-payment exceptions. C078–C086; S001, S019.Taxpayer-role facts, relevant age/event, qualifying payment series; all remain held.Insured age suffices; hardship or annuity death exceptions automatically transfer to MECs.Published authority resolving §72(v) periodic-payment methods/modification and the instruction’s five-year reference.
B13 — Interest deduction separateAnswered restrictions: §§264/163 impose independent gates and narrow exceptions. C087–C099; S004–S005, S006 note.Purchase/debt dates, purpose, ownership, business/key-person predicates, actual interest/elections.Nontaxable loan proceeds imply deductible interest; a §264 exception proves a deduction.Generic published guidance for the specifically implicated §264 or §163 limitation, within the parent’s deduction hold.
B14 — Reporting versus substantive taxAnswered distinction: reporting fields and withholding classify information, not final liability; code L is §72(p). C086, C106–C113; S019–S022.Actual reportable event, payer predicates, report/version, withholding facts.A sample box, code, or withholding amount establishes tax or a filing duty.Current public instructions and relevant final reporting regulations for the identified event; no filling or filing.
B15 — Death/beneficiary treatment not establishedAnswered boundary: §101 is separate, with its own exceptions; MEC status alone does not determine a death benefit. C025, C082, C105; S002–S003, S006.Death, beneficiary-role, transfer, ownership, and other §101 predicates.“Death benefits are tax-free” supplies authority for lifetime borrowing.Only the relevant published §101 provision if this boundary must later be developed; full death-benefit work stays held.
B16 — Tax rule versus insurance consequenceAnswered scope distinction: tax treatment supplies no borrowing right or coverage/suitability conclusion. C100; S001, S003–S005.Contractual rights, interest terms, repayment, lapse/coverage effects, nonfederal law.A favorable tax branch makes borrowing safe, available, or advisable.No further inquiry in this pass; those subjects are expressly held.
B17 — Benefit reduction unknownAnswered rules: first-seven-year MEC retesting and first-fifteen-year cash-distribution recapture are different; each has its own lookback/exceptions. C015–C020, C038, C044–C045; S002–S003.Reduction type/date, distribution relationship, reinstatement, joint-life structure.A non-MEC withdrawal is invariably investment-first; all reductions use one clock.Published guidance on the identified reduction and the relevant statutory ceiling or retesting rule.
B18 — Exchange unknownAnswered statutory boundary; partial historic regulation metadata: permitted direction, same-insured/obligee, boot/liability, basis, and MEC carryover are separate. C101–C104; S002, S007–S009, S015.Exchange character, consideration, debt assumption, qualifying roles, prior status.A replacement resets MEC status or every debt balance is taxable exchange consideration.Published §1035 interpretation and original final-rule history pertinent to the precise generic exchange issue.
B19 — Long-term-care charge/rider unknownAnswered conditional rule: qualifying value-funded charges have special exclusion/investment reduction; qualifying rider changes have a specific material-change exception. C068–C069; S001, S011.Qualified rider status, charge character, relevant dates, incorporated qualification predicates.Every rider charge is an ordinary withdrawal; every rider addition creates a new MEC test period.Published §7702B/§72(e)(11) guidance and applicable incorporated standards, without medical or policy records.
B20 — Annuity starting date unknownAnswered boundary: nonannuity receipts before and after that date, regular annuity payments, and full-surrender/refund amounts use different provisions. C053, C056–C057, C061, C073–C075; S001, S012–S013.Payment character, starting date, partial-annuitization allocation, option exercise.Pre-start income-first or life-contract recovery rules apply unchanged after annuitization.The precise final §72 regulation and historical effective-date provision governing the relevant payment category.

Captured table 12

Audit field · Evidence / entry · Authority / version / pinpoint · 60 data rows

Audit fieldEvidence / entryAuthority / version / pinpointAssessment / unresolved issue
Federal contract category
Applicable qualification regime
Applicable-law qualification predicate
Selected §7702 qualification test
Qualification continuity or failure
Issue-date predicate
Historical transition predicate
Contract-year convention
Material-change predicate
Benefit-reduction predicate
Reinstatement predicate
Exchange predicate and direction
Prior MEC or successor-exchange status
Seven-pay determination
Seven-pay amount-paid adjustments
Premium-return predicate
Investment-in-contract components
Prior excluded distributions
Prior taxable deemed receipts
Transfer-for-value adjustment
Annuity starting-date predicate
Cash receipt characterization
Loan receipt characterization
Assignment / pledge / agreement characterization
Assigned or pledged portion measurement
Burial/funeral exception predicate
Outstanding principal characterization
Accrued interest characterization
Capitalized interest characterization
Repayment characterization
Cash-value measurement convention
Surrender-value measurement convention
Complete-surrender/refund predicate
Lapse / termination / discharge characterization
Gross contract receipt components
Debt application or assumption components
Net cash reconciliation
Prior-treatment reconciliation
Calendar-year aggregation predicate
Other statutory aggregation predicate
Additional-tax inclusion base
Taxpayer-age exception predicate
Disability exception predicate
Periodic-payment exception predicate
Periodic-payment modification authority
Separate interest-deduction provision
Long-term-care rider/charge predicate
Reporting provision and version
Reporting versus withholding reconciliation
Death-benefit boundary
Contractual-consequence boundary
Source legal status
Source applicability/effective date
Source access date
Printed page
Zero-based PDF index
Actual read extent
Authority gap
Next permissible public-law inquiry
Researcher self-check

Captured table 13

Requested item / subquestion · Status · Finding and evidence crosswalk · 35 data rows

Requested item / subquestionStatusFinding and evidence crosswalkMissing evidence or exact next permissible inquiry
1 — Complete material §72 provisionsAnswered, selected complete provisionsS001 read bounds; C005, C053–C086; B05–B14, B20.Actual application unresolved; no claim of whole-§72 reading.
1 — Actual life-contract definitionAnsweredC002–C034; S003, S006, S014, S024; B01–B02.Qualification facts held; targeted further published qualification guidance only.
1 — Actual MEC definition and seven-pay computationAnswered statutory frameworkC035–C048; S002; B03, B17.Actual actuarial test and contract facts held.
1 — Investment and distinct value definitionsAnsweredC003–C005, C013, C046, C056, C058, C094; S001–S004.Actual measurement inputs absent; no interchange of definitions.
1 — Nested benefit-reduction/material-change rulesAnsweredC015–C020, C038–C045, C069; S002–S003, S011.Actual reduction/change/rider predicates held.
1 — Issue/exchange/grandfather triggersAnswered with specific partial issueC007, C028–C034, C044, C049–C052, C060, C070; S001–S003, S006, S014.§7702(i)’s post-2020 legacy cross-reference remains partial; next inquiry is published Treasury/IRS interpretation.
1 — AggregationAnswered statutory rulesC012, C042, C070, C092, C095; B11.Additional regulatory anti-abuse application not presumed; exact statutory grouping facts held.
1 — No uniform permanent-policy/loan/balance inferenceAnswered boundaryC002, C035, C054–C066, comparison table.No actual classification supplied.
2 — Non-MEC versus MECAnsweredC035, C054–C059, C070, C078–C082; S001–S002.Application unresolved without qualification/MEC evidence.
2 — Annuity and excluded-contract comparisonAnswered to necessary boundaryC026, C060, C071, C073–C077, C083–C085.Full annuity/retirement analysis excluded; B02, B20 identify permitted next inquiry.
2 — Unknown/nonqualifying categoryAnswered conditional ruleC023–C025; S003 §7702(g); B01.Actual failure and annual/catch-up amounts unresolved.
2 — Loan and collateral assignment/pledgeAnswered statutory triggerC054–C059, C071–C072; B06–B07.Character, affected portion, timing, and exceptions unknown.
2 — Cash distribution ordering and investment recoveryAnswered conditional ruleC005, C016–C020, C053–C061, C067–C075.Receipt/start-date/aggregation inputs absent.
2 — Complete surrender/refund/maturityAnsweredC061–C064; S001, S013, S016–S018.Actual amount received and prior investment unknown.
2 — Lapse/termination/discharge and zero-cash eventsPartial public-law coverage; unresolved applicationC064–C066; B08–B10.Need event-specific published authority and absent event mechanics; no case or record query.
2 — Separate cash, income, liability, policy debt, and later eventAnswered analytical distinctionC005, C057–C058, C064–C066, C103, C107–C113.No actual reconciliation possible.
3 — MEC additional-tax base/rateAnsweredC078; S001 §72(v)(1).Includible amount unknown; E0.
3 — Age/disability/periodic-payment exceptionsAnswered statutory predicatesC079–C082; S001 §§72(v)(2), (m)(7); B12.Actual taxpayer/event evidence held.
3 — Periodic-payment modification/recapturePartialC084, C086; S001 versus S019.Published §72(v)-specific authority resolving instruction/statute tension not established.
3 — Necessary interest-deduction provisionsAnswered statutory gates; application excluded/heldC087–C099; S004–S006; B13.Full deduction tracing, business ownership, rates, elections, and calculations held.
3 — No borrowing prohibition from deduction restrictionAnswered boundaryC091, C099–C100.Contractual rights and insurance consequences excluded.
3 — No §72(p), consumer-loan, or death-benefit importationAnswered boundaryC065–C066, C077, C082, C105, C112.Other components and full death/COD regimes excluded.
4 — Necessary final regulationsAnswered selected reading; partial original-history verificationS012–S015; C029, C061, C073, C102.Original §1.1035-1 issuance/effectiveness and complete old-T.D. histories not verified.
4 — Published IRS interpretation and modification statusAnsweredS016–S018; C062–C064.No universal loan-lapse conclusion extrapolated from a loan-free ruling situation.
4 — Public instructions, version, fields, reporting functionAnswered selected material bodyS019; C086, C109–C112.Exact issuance day not established; no whole-document/form-pixel claim.
4 — Reporting/withholding authorityAnswered boundaryS020–S022; C106–C108, C113.Actual obligation and full reporting rules held.
4 — Primary-source status/access/read boundsAnswered with disclosed gapsSource register, C001, source-read/failure log.Compilation dates are not a complete later-law or judicial audit.
5 — Provision-specific comparisonAnsweredSection 3; C002–C113 as linked there.All actual applications remain unresolved.
5 — At least twelve substantive branchesAnswered: B01–B20Each branch contains rule, C/S links, missing evidence, adverse inference, next inquiry.None populated with an identifying entry.
5 — Wholly blank evidence/audit worksheetAnsweredSection 5.All entry cells deliberately blank.
5 — No borrowing/surrender/lapse/replacement recommendationAnswered scope requirementC100; B16, B18.Suitability and contractual consequences excluded.
6 — Optional mathematical illustrationOmitted with reasonE0; Section 6.Missing trigger, measurement, ordering, aggregation, and convention inputs.
6 — No actual deadline/value/deduction/tax billAnswered scope requirementE0; no application numbers supplied.Statutory dates and thresholds are stated only as law.
Parent holds and other A036 componentsExcluded with reasonC077, C100, C105, C113; B13, B15–B16.Retirement, equity, family help, savings/asset sales, other taxes, nonfederal law, insurer practices, and full remedies/reporting remain reserved.
Independent review / acceptanceNot performed or claimedResearcher self-check below.No component, parent, operational, or publication acceptance.

Captured table 14

Log entry · What occurred · Treatment and remaining limit · 10 data rows

Log entryWhat occurredTreatment and remaining limit
R036-P1-F001 — Legacy OLRC routesInitial legacy granule-based requests for §§72, 7702A, 7702, and 264 failed.Recovered the official versioned bodies recorded in S001–S004. Failure was not treated as absence of law.
R036-P1-F002 — Intermittent versioned-page accessA later direct request to https://uscode.house.gov/us/usc/119-124/t26/s72/ returned inaccessible.Reopening the previously retrieved official source succeeded; the complete relevant §72(e) body was re-read. The failed request does not negate the successful read.
R036-P1-F003 — Current-edition redirectsSome current OLRC routes first returned only a redirect page; certain direct version guesses also failed.The actual “Continue” links were followed to the source bodies, including §§1031, 6047, and 807. Redirect/index text was not used as substantive law.
R036-P1-F004 — Additional §7702 regulation leadAn attempted §1.7702-1 access did not supply a usable body.No rule was inferred from that failure, and no proposed or unavailable text was treated as operative. The successfully read age regulation is specifically §1.7702-2.
R036-P1-F005 — Search results outside scopeGeneric searches returned some private determinations, case discussions, and provider-related material among results.Those materials were not followed or relied on. No identifying-party, policy, account, case-record, or provider investigation was conducted.
R036-P1-F006 — Truncated retrieval outputSome long statutory outputs were truncated.Material sections and notes were reopened or read in bounded portions. Whole-read claims are confined to the instruments identified as whole in the source register.
R036-P1-F007 — PDF modalityS016 and S017 were available as parsed PDF text.All stated PDF pages were read as text. Printed pages and zero-based indexes are separately recorded. No claim of pixel or unseen scan inspection.
R036-P1-F008 — Publication metadata limitsExact issuance/revision days were not established for the 2025 publication and 2026 instructions; original issuance/effectiveness of §1.1035-1 was not verified.These are explicit metadata gaps. Version headings and current codification were not substituted for original issuance/effectiveness findings.
R036-P1-F009 — Same instrument in multiple formatsRulings and T.D. 9287 were encountered in PDF/eCFR/IRB formats.Formats are grouped under one source ID per instrument. They are not counted as independent corroboration.
R036-P1-F010 — Targeted unresolved-authority searchesGeneric official-source searches did not establish a complete §72(v)-specific recapture authority or one exhaustive rule covering every zero-cash lapse and capitalized-interest configuration.The gaps remain C065–C066 and C086. A failed or unproductive search is not a finding that no law exists.
Source links captured in this table

Find the assertion and its boundaries

Read the evidence with its boundaries. These are saved research components, including revisions. A scoped coordinator review checks selected evidence; it does not certify every claim, a complete jurisdiction, current law or individual applicability. Dates and access limits remain attached to the records.

How to read the research →

R036-P1-C001 Saved research record

The retrieved statutory versions and targeted classification check support the version statements in the source register. They do not establish that every later enactment, judicial development, or original regulatory effective-date instrument was audited.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001–S024, their stated currency/read bounds; S023, currency page and 2026 Title 26 classification block.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001", "R036-P1-S002", "R036-P1-S004"]}
R036-P1-C002 Saved research record

Under the generally applicable §7702 definition, a life-insurance contract must be life insurance under applicable law and satisfy either the cash-value-accumulation test or both the guideline-premium requirements and cash-value corridor. A product label does not establish these elements. The church-plan exception is separately addressed in C027.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(a)(1)–(2), (j). uscode.house.gov

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C003 Saved research record

For §7702, “cash surrender value” means cash value determined without regard to a surrender charge, policy loan, or reasonable termination dividends. Thus this statutory measurement can differ from cash deliverable after charges and debt offsets.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(f)(2)(A). This is a section-specific definition, not a universal definition for every tax provision or contract.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C004 Saved research record

For §7702, “net surrender value” takes surrender charges into account but disregards policy loans. It is therefore distinct from both C003’s measure and net cash actually paid.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(f)(2)(B).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C005 Saved research record

For §72(e), investment in the contract on a date is aggregate premiums or other consideration paid before that date, reduced by prior amounts received to the extent excludable under the subtitle or prior income-tax laws. The specific adjustments in C058, C068, and C072 must also be considered. “Basis” is not assumed to equal premiums, account value, or loan balance.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S001, §72(e)(6), (e)(4)(A), (e)(11), (g). uscode.house.gov

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["surrender_and_modification"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C006 Saved research record

The cash-value-accumulation test requires contract terms preventing cash surrender value at any time from exceeding the net single premium needed then to fund future benefits. Computation uses the greater of the applicable accumulation-test minimum rate or guaranteed issue rates, the specified mortality/additional-benefit charge rules, and the specified current/future-benefit assumptions.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(b)(1)–(2), incorporating (c)(3)(B)(i)–(ii), (e)(1)(A), (D).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C007 Saved research record

For contracts issued after December 31, 2020, the accumulation-test minimum is the lesser of 4% and the statutory insurance interest rate at issue; the guideline-premium minimum is that accumulation minimum plus two percentage points. The insurance interest rate is the lesser of the specified valuation and federal-rate measures for the adjustment year, or latest adjustment year. The federal-rate measure averages the prescribed 60 monthly mid-term rates, annually compounded, and rounds to the nearest whole percentage point. The statutory 2% transition begins January 1, 2021 and ends before the first adjustment year after 2021; it is not proof of a universal 2026 rate.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(b)(3), (c)(3)(E), (f)(11)(A)–(E); P.L. 116-260 div. EE §205(e). No rate series or actuarial calculation performed.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements", "qualification_dates_and_age"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C008 Saved research record

Under the guideline-premium route, cumulative premiums paid cannot exceed the guideline-premium limitation at any time. That limitation is the greater of the guideline single premium or the sum of guideline level premiums to that date.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(c)(1)–(2).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C009 Saved research record

The guideline single premium is determined at issue, except for required adjustments, using the statutory mortality, reasonably expected charge, and interest assumptions. An unspecified charge is zero for this computation; industry experience substitutes for insufficient company experience only to the extent provided by regulations. Guideline level premiums run over a period not ending before insured age 95, using the accumulation minimum instead of the higher guideline minimum. Prevailing tables and the statutory three-year table-transition option are separately relevant.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(c)(3)–(4), (f)(10). Current mortality clause uses the statutory alternatives in (c)(3)(B)(i); no actual table or charge assumption established.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C010 Saved research record

Under the corridor route, the death benefit must at all times be at least the applicable percentage of cash surrender value. The percentage uses attained age at the beginning of the contract year and decreases ratably for each full year within the statutory bands reproduced immediately below.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(d)(1)–(2); age rules in S014. These are qualification ratios, not income-tax rates or borrowing limits.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["corridor"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C011 Saved research record

Except for the corridor calculation, §7702’s general assumptions deem death and qualified additional benefits nonincreasing, maturity between insured ages 95 and 100, death benefits continuing to that deemed maturity, and endowment benefits—including maturity cash surrender value—not exceeding the least death benefit. Specified death-benefit increases may be recognized to preserve the excess over cash surrender value; the cash-value-accumulation alternative requires the stated net-level-reserve test and premium period not ending before age 95.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(e)(1), (e)(2)(A)–(B).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C012 Saved research record

A separate burial/funeral qualification rule permits specified increases for cash-value-accumulation testing only if initial death benefit is at most $5,000, maximum death benefit at most $25,000, annual fixed predetermined increase is at most 10% of initial benefit or 8% of preceding-year benefit, and the purchase is for the specified burial/prearranged-funeral expenses. Initial death benefit aggregates all contracts issued to the same owner. This rule is excluded from the MEC seven-pay computational cross-reference.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(e)(2)(C); S002, §7702A(c)(1)(B). The burial-increase amendment applies to contracts entered into after October 22, 1986, per S003’s note.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements", "qualification_dates_and_age"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C013 Saved research record

§7702 “premiums paid” is its own measure: premiums less specified nontaxable §72(e) amounts, specified excess-premium distributions, and other amounts prescribed by regulations. A premium portion returned with interest to comply with the guideline requirement within 60 days after the contract year reduces premiums for that year, excluding the interest; the returned interest is income.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(f)(1)(A)–(C). This is not automatically the same measure as §72 investment or §7702A “amount paid.”

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C014 Saved research record

A premium otherwise exceeding the guideline limit is disregarded for that limit only to the extent necessary to prevent termination through the end of the contract year, and only if the contract has no cash surrender value at the end of the extension period.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(f)(6). This is not a general excess-premium permission or loan exclusion.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C015 Saved research record

An unreflected change in benefits or other terms requires proper adjustments in future §7702 determinations. A §7702 adjustment and a §7702A material change are related inquiries governed by different text.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(f)(7)(A); compare S002, §7702A(c)(3).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C016 Saved research record

If an unreflected change reduces benefits during the 15-year period beginning on issue, and a cash distribution results, §72 applies without §72(e)(5) up to the applicable recapture ceiling. Thus a qualifying contract outside the MEC rules can have a distribution for which the ordinary §72(e)(5) treatment is displaced.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(f)(7)(B). The ceiling is not itself a declaration that its entire amount is taxable. uscode.house.gov

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C017 Saved research record

For a cash-value-accumulation contract and a reduction within the first five years, the recapture ceiling is the excess of cash surrender value immediately before reduction over the net single premium immediately afterward.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(f)(7)(C)(i).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C018 Saved research record

For a guideline-premium contract and a reduction within the first five years, the ceiling is the greater of: premiums before reduction exceeding the adjusted guideline limit; or cash surrender value before reduction exceeding the post-reduction cash-value corridor.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(f)(7)(C)(ii)(I)–(II).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C019 Saved research record

For a reduction after the first five years but within the first fifteen, the ceiling is the excess of pre-reduction cash surrender value over the post-reduction corridor, whether or not the contract otherwise uses that corridor test.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(f)(7)(D).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C020 Saved research record

The benefit-reduction rule also addresses anticipatory distributions. A distribution reducing cash surrender value and made within two years before a benefit reduction is statutorily treated as anticipatory; the ceiling provisions require appropriate adjustments.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(f)(7)(E), including its regulatory direction.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C021 Saved research record

Qualification failure is not automatically cured. The Secretary may waive failure only if the taxpayer establishes reasonable error and reasonable remedial steps to the Secretary’s satisfaction.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(f)(8). No waiver, closing agreement, or request is assumed or pursued.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C022 Saved research record

Variable contracts require additional classification checks. §7702 testing occurs whenever death benefits change and at least once each 12-month period. §817 defines variable contracts and imposes a diversification condition, subject to its exceptions and regulatory rules. A “variable life” label alone does not establish qualification.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(f)(9); S010, §817(d), (h). Detailed diversification application remains partial because §1.817-5 and actual investments are outside this completed reading.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C023 Saved research record

A contract that is life insurance under applicable law but fails §7702(a) can produce annual ordinary income under §7702(g). The statutory annual measure is the excess of the increase in net surrender value plus the cost of protection over premiums paid. Protection cost is the lesser of the specified regulatory uniform-premium measure, using five-year age brackets, or stated mortality charge.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(g)(1)(A), (B), (D). No annual amount established.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C024 Saved research record

If such a contract ceases to qualify during a year, income on the contract for all prior taxable years is treated as received or accrued in the cessation year under the statutory catch-up rule.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(g)(1)(C). This is a qualification-failure rule, not a universal lapse or loan-balance rule.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C025 Saved research record

For a state-law life contract failing §7702(a), only death proceeds exceeding net surrender value receive the specified deemed-life-insurance treatment under §7702(g)(2). The contract nevertheless remains an insurance contract for the Code under (g)(3). Failure does not automatically make it a MEC or an ordinary annuity.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(g)(2)–(3). Full beneficiary treatment remains unestablished.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C026 Saved research record

Section 7702 extends its qualification/failure rules to applicable-law endowment contracts and separately defines qualifying endowment contracts for the Code. Section 72 also includes certain face-amount certificates issued after December 31, 1954 within its endowment-contract terminology. These provisions prevent classification solely from a product title.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(h); S001, §72(l). The incorporated securities-law certificate definition was not needed to classify an actual instrument and was not independently developed.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C027 Saved research record

The applicable-law limb of §7702(a) is waived for the specified church-provided death-benefit arrangements for employees and beneficiaries, directly or through the specified organizations. The other federal qualification requirements are not thereby universally waived.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(j)(1)–(3). No employment, church, or organizational facts supplied; application excluded.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C028 Saved research record

The printed §7702(i) qualified-20-pay rule requires at least 20 nondecreasing annual premiums and an existing plan filed before September 28, 1983, on file in the appropriate state. Its text substitutes 3% for 4% in §7702(b)(2). Because the 2020 amendment changed that subsection’s rate wording, a modern application of this legacy cross-reference is not resolved here.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, §7702(i); P.L. 98-369 §221(d)(3); 2020 amendment notes. Annual rather than monthly excess-interest crediting does not itself defeat the specified pre-1983-plan predicate.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_and_measurements"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C029 Saved research record

Final §1.7702-2 governs attained age for specified §7702 tests: actual birthday age or a consistently used contract age within 12 months of actual age, changing annually. First-to-die contracts use the oldest insured; last-to-die contracts generally use the youngest, with the prescribed youngest-surviving rule when both cash-value and future-mortality terms change at death. It applies to contracts issued after December 31, 2008, or on/after October 1, 2007 using the specified 2001 tables; earlier use is permitted only under its consistency condition.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S014, §1.7702-2(a)–(f). This actuarial insured-age rule does not establish the taxpayer-age exception under §72(v).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_dates_and_age"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C030 Saved research record

Section 7702 generally applies to contracts issued after December 31, 1984, in taxable years ending afterward. It also reaches specified increasing-death-benefit contracts issued after June 30, 1984 with funding faster than ten-year level premiums, subject to C031–C032. For a master contract, the relevant issue date for an insured is first coverage.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, P.L. 98-369 §221(d)(1), (2)(A), (5).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_dates_and_age"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C031 Saved research record

The early-1984 application has three alternative exceptions: a contract meeting the specified §101(f) test; a nonflexible-premium contract meeting the modified §7702 test using 3% and the specified latest-maturity/20-year/age-95 assumption; or the specified periodically adjusted level-premium arrangement using at least 3%, with a comparable death-benefit adjustment allowed at the insured’s option.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, P.L. 98-369 §221(d)(2)(B)(i)–(iii). These are historical predicates, not a blanket pre-1985 exemption.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_dates_and_age"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C032 Saved research record

A further 1984 transition substitutes September 30, 1984 for June 30 when the contract meets the specified modified §7702 test, disregards the specified mortality charges and initial excess-interest guarantees in determining guaranteed rates, and never exceeds the prescribed net-single-premium value. That value uses 3%, the specified 1958 tables, and a level death benefit. A flexible-premium contract issued during 1984 that meets §7702 is treated as meeting §101(f).

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S003, P.L. 98-369 §221(d)(2)(C); §221(b)(3), as added in 1986.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C033 Saved research record

Section 101(f)’s pre-1985 flexible-premium category has its own predicates. It concerns premiums not fixed as to both timing and amount, excluding a state-law annuity portion other than a settlement option. Its death-payment condition requires either the guideline-limit/corridor route or the cash-value/net-single-premium route. Its corridor begins at 140% through age 40, decreases one percentage point per later year, and bottoms at 105%. Its guideline assumptions use guaranteed charges and the greater of 6% or guaranteed rates, with 4% for level premiums; its net-single-premium interest floor is 4%, or 3% for issuance before July 1, 1983. It has distinct maturity, benefit-change, qualified-additional-benefit, premium-refund-within-60-days, necessary-premium, and reasonable-error provisions. These historical tests cannot be replaced by a current product label.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S006, §101(f)(1)–(3), read completely. Cash value disregards surrender charges and policy loans; net-single-premium mortality uses the specified guaranteed/all-state-table predicate; maturity and endowment assumptions are those in (2)(D), (3)(G). No actual death exclusion or actuarial determination made.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C034 Saved research record

The 2017 mortality/table amendments have an effective-date rule for taxable years beginning after December 31, 2017. The accompanying reserve transition and eight-year reserve adjustment concern the specified reserve provisions; they are not a policyholder loan-income spreading rule.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S003, amendment/effectiveness notes; S024, P.L. 115-97 §13517(c)(1)–(3).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["qualification_dates_and_age"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C035 Saved research record

A modified endowment contract—MEC—must first meet §7702. It is a contract entered into on or after June 21, 1988 that fails the seven-pay test, or a qualifying contract received in exchange for such a MEC or a successor exchange contract. Failure of §7702 is not the MEC definition.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(a)(1)–(2). uscode.house.gov

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C036 Saved research record

The seven-pay test fails if, at any time during the first seven contract years, accumulated amount paid exceeds the cumulative net level premiums that would have been paid by then for paid-up future benefits after seven level annual premiums. It is not a comparison only at year-end or only against actual premiums scheduled by the contract.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(b).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C037 Saved research record

Seven-pay premiums are determined at issue using §7702(b)(2) and (e), excluding the burial-increase rule in §7702(e)(2)(C). The first-contract-year death benefit is deemed to continue through maturity, disregarding scheduled reductions after the first seven years.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(c)(1). Applicable historical interest assumptions still require the issue-date analysis.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C038 Saved research record

A benefit reduction within the first seven contract years requires testing as though originally issued at the reduced level. A reduction attributable to nonpayment of premiums is disregarded for this rule if benefits are reinstated within 90 days after reduction.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(c)(2)(A)–(B). No reinstatement or deadline is established for an actual contract.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C039 Saved research record

An unreflected material change in benefits or other terms makes the contract a new contract, for §7702A, on the day the change takes effect. Seven-pay testing must make appropriate adjustments for cash surrender value under the contract.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(c)(3)(A)(i)–(ii).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C040 Saved research record

Material changes include death-benefit increases and increases/additions of qualified additional benefits. The definition excludes increases attributable to premiums necessary to fund the lowest death-benefit/additional-benefit level payable in the first seven years, after the specified §7702(e)(2)(A)–(B) increases, and interest, earnings, or policyholder dividends on those necessary premiums.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(c)(3)(B)(i).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C041 Saved research record

A cost-of-living increase is excluded from material-change treatment only to the extent provided in regulations, using an established broad-based index and ratable funding over the remaining required-premium period. The statutory regulatory authorization alone does not establish a particular increase qualifies.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(c)(3)(B)(ii). No applicable regulatory allowance was assumed.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C042 Saved research record

If initial death benefit is at most $10,000 and at least seven nondecreasing annual premium payments are required, each statutory seven-pay level premium is increased by $75. For this test, the contract and all contracts previously issued by the same company to the same policyholder are one contract.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(c)(4). This aggregation is not limited to one calendar year.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C043 Saved research record

Expenses attributable solely to collection of premiums more frequently than annually can enter seven-pay computation only under rules prescribed by regulation. The statute does not itself provide an unrestricted expense adjustment.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(c)(5).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C044 Saved research record

For the specified second-death or simultaneous-death contract, reduction below the lowest death benefit provided during the first seven contract years requires testing as originally issued at the reduced benefit. The reduction clause itself is not limited to reductions occurring during those seven years. This amendment applies to contracts entered into on or after September 14, 1989.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(c)(6); P.L. 101-239 §7647(b).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C045 Saved research record

Failure affects distributions in the contract year of failure and later contract years, plus anticipatory distributions under the statutory/regulatory rule. A distribution within two years before failure is deemed anticipatory. Consequently a later failure can affect an earlier distribution; the text does not simply tax every outstanding balance upon reclassification.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(d)(1)–(2), concluding sentence.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C046 Saved research record

For seven-pay testing, “amount paid” means premiums less §72(e) amounts that are not included in gross income, determined without the loan/pledge deeming rule in §72(e)(4)(A). This differs from both §72 investment and §7702 premiums paid.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(e)(1)(A).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C047 Saved research record

A premium portion returned with interest to comply with the seven-pay test within 60 days after the end of the contract year reduces that year’s premiums, excluding the interest. The returned interest is included in the recipient’s gross income notwithstanding §72(e).

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(e)(1)(B)–(C). No actual correction or timely refund established.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C048 Saved research record

A contract year is the 12-month period beginning with the first month for which the contract is in effect, and corresponding successive periods. It is not necessarily a calendar year. Other §7702A terms generally take their §7702 meanings.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, §7702A(e)(2)–(3).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C049 Saved research record

The 1988 MEC amendments generally apply to contracts entered into on or after June 21, 1988. The successive-exchange clarification was made effective as part of the 1988 amendments. The 2002 enactment repealed the intervening “old contract” wording in the cash-value adjustment clause as though that amendment had not occurred.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, P.L. 100-647 §5012(e)(1); P.L. 106-554 §318(a)(3); P.L. 107-147 §416(f).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C050 Saved research record

For the historical issue-date transition, a death-benefit increase of more than $150,000 over the benefit in effect on October 20, 1988 invokes the material-change rules in determining post-June 20, 1988 status. This particular trigger does not apply if, as of June 21, 1988, at least seven level annual premiums were required and at least seven are actually made.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, P.L. 100-647 §5012(e)(2). The exception is not automatically an exception to every other material-change rule.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C051 Saved research record

A pre-June 21, 1988 contract is treated as later-entered if a death benefit or qualified additional benefit is increased/added on or after that date without a preexisting unilateral right to obtain it without additional insurability evidence; or if it is converted after June 20, 1988 from term to nonterm coverage, regardless of a prior conversion right.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, P.L. 100-647 §5012(e)(3)(A)–(B).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C052 Saved research record

A narrow historical exchange exception concerned MECs entered into after June 20 and before November 10, 1988, requiring at least seven level annual premiums, exchanged within three months after enactment for seven-pay-compliant life insurance, with an election to recognize gain notwithstanding §1035. It does not establish a presently available general MEC “reset.”

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S002, P.L. 100-647 §5012(e)(4). No calendar deadline calculated.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C053 Saved research record

Section 72(e) addresses an amount received under an annuity, endowment, or life-insurance contract that is not received as an annuity, and only when another provision of the subtitle does not apply to that amount. A dividend or similar distribution is treated as nonannuity receipt.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S001, §72(e)(1)(A)–(B). Classification comes before ordering.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["surrender_and_modification"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C054 Saved research record

For nonannuity life/endowment amounts within §72(e)(5)(C), absent its MEC/regulatory exceptions and other statutory overrides, §72(e)(2)(B)’s income-first allocation and §72(e)(4)(A)’s loan/pledge deeming do not apply. If the post-annuity-starting-date rule does not apply, inclusion is only to the extent the amount exceeds investment in the contract. Thus a genuine policy borrowing is not made a distribution merely by the switched-off deeming rule.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S001, §72(e)(5)(A), (C); qualifications C016–C020, C055, C068, C074. This is not a finding that an actual advance is a genuine loan. uscode.house.gov

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["surrender_and_modification"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C055 Saved research record

For a MEC, §72(e)(10) overrides the life/endowment exception, applies §72(e)(2)(B) and (4)(A), and substitutes “any person” for “an individual” in the deeming rule. Taxable income still depends on the applicable allocation and exceptions; MEC status does not make every dollar of every loan taxable.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(e)(10)(A); S002, §7702A(d).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001", "R036-P1-S002"]}
R036-P1-C056 Saved research record

In the pre-annuity-starting-date income-first framework, the amount is allocated to income up to the excess, if any, of cash value without surrender charge immediately before receipt over investment then. The balance is allocated to investment. The statute’s own §72 measurement must be used; §7702’s separate definition is not silently substituted.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S001, §72(e)(2)(B), (3)(A)–(B). Aggregation under C070 may change the relevant combined measurement.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["surrender_and_modification"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C057 Saved research record

Within that framework, direct or indirect receipt of an amount as a loan under the contract, or assignment, pledge, or agreement to assign/pledge a portion of contract value, causes that amount or portion to be treated as received as a nonannuity amount. The assigned/pledged portion is not automatically the face death benefit or the entire unassigned contract.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(e)(4)(A)(i)–(ii), with MEC substitution in (e)(10)(A)(ii). A collateral event can matter without delivery of new cash by the insurer.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C058 Saved research record

The loan/pledge deeming sentence does not itself apply in determining investment in the contract, except that investment increases by the amount actually included in gross income because of that deeming. Thus neither subtracting the entire deemed loan from investment nor adding the entire loan as a premium follows from this rule.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(e)(4)(A), final sentence. Actual repayments and later applications of debt require separate characterization; no automatic repayment adjustment is invented.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C059 Saved research record

A MEC assignment or pledge is excepted from §72(e)(4)(A) when it is solely to cover the burial/prearranged-funeral expenses referenced by §7702(e)(2)(C)(iii), and maximum death benefit is at most $25,000. The exception is for assignment/pledge; it is not an express exception for every loan. It does not import all the separate initial-benefit/increase limits of C012.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(e)(10)(B).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C060 Saved research record

Section 72(e)(5) also protects the specified pre-August 14, 1982 contract treatment, but investment allocable after August 13, 1982 is treated as from a later contract. Accordingly an annuity comparison cannot simply assume that all old and new investment has identical income-first or loan-deeming treatment.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(e)(5)(B); P.L. 97-248 §265(c). No retirement-plan renewal transition is imported.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C061 Saved research record

Section 72(e)(5)(E) separately covers amounts received on complete surrender, redemption, or maturity, and amounts received in full discharge of the contract obligation in the nature of a refund of consideration. It also switches off §72(e)(2)(A) for those amounts. Section 72(e)(10) overrides (5)(C), not the separate full-surrender text in (5)(E).

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S001, §72(e)(5)(A), (E), (10)(A); S013, §1.72-11(c)–(d). “Full discharge” here is not a blanket rule for cancellation of a borrower’s debt.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["surrender_and_modification"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C062 Saved research record

Rev. Rul. 2009-13 applies §72(e)(5) to a qualifying life contract’s surrender, treats the excess over investment as ordinary income, and does not reduce surrender investment by cost-of-insurance charges in its stated situation. Its surrender facts include no policy loans or prior distributions, so it does not establish a universal indebted-lapse calculation.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S016, Situation 1 analysis, printed pp. 3–5 / PDF indexes 2–4; holding 1, printed p. 11 / index 10.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["surrender_and_modification"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C063 Saved research record

Rev. Rul. 2009-13 must be read with Rev. Rul. 2020-05’s modifications concerning the later statutory adjusted-basis rule. Using the original ruling as wholly unchanged would misstate its status. The separate sale analyses are not a foundation for this component.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S017, printed pp. 4–6 / indexes 3–5, modifying S016; stated effective date transactions on/after August 26, 2009.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["surrender_and_modification"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C064 Saved research record

Publication 525’s cash-surrender explanation subtracts unrepaid loans not previously included in income in its simplified cost description. This supports the need to reconcile debt and cash in a surrender computation. It does not authorize simultaneously adding the same debt to gross proceeds and subtracting it again from statutory investment, or reducing §72(e)(6) investment every time a non-MEC loan originates.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S018, “Surrender of policy for cash,” read with S001, §72(e)(4)(A), (5)(E), (6). The anti-double-counting conclusion is an analytical reconciliation, not an additional statutory formula.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["surrender_and_modification"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C065 Saved research record

The labels “lapse,” “termination,” “discharge,” and “write-off” do not by themselves identify a receipt or its measure. If an event constitutes a complete surrender or refund, C061 controls its ordering; if a MEC loan/pledge is deemed received, C055–C058 control. Whether a particular event applied value to debt, discharged a contractual obligation, or produced another legally relevant amount remains fact-dependent.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S001, §72(e)(4), (5)(E), (6), (10); S018. Partial: the selected noncase authorities do not establish one exhaustive treatment for every zero-cash lapse, interest capitalization, or debt discharge.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["surrender_and_modification"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C066 Saved research record

Cash originally advanced, an outstanding principal balance, accrued interest, newly capitalized interest, a new advance, repayment, and later contract settlement are distinct events or measurements. The read §72 provisions do not justify treating every unchanged balance as a new annual receipt or importing §72(p)’s plan-loan rules for interest, renewal, cure, or repayment.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(e)(4)(A), (6), (10); boundary (p)(1), (5). Treatment of a particular capitalization or refinancing remains unresolved without its legal character and pertinent published authority.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C067 Saved research record

A dividend retained by the insurer as a premium or other consideration is not included under §72(e)(2)(B)(i) to that extent. A cash dividend and a retained-premium dividend therefore require different facts and cannot automatically be treated as either a loan or newly paid outside cash.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(e)(1)(B), (4)(B), (6).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C068 Saved research record

A charge against annuity cash value or life-insurance cash surrender value for coverage under a qualified long-term-care contract that is part of or a rider on the contract is not included in income under §72(e)(11), notwithstanding the specified ordinary/MEC rules. It reduces investment, but not below zero. The 2006 provision generally applies to contracts issued after December 31, 1996, for taxable years beginning after December 31, 2009.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(e)(11); P.L. 109-280 §844(g)(1). No rider qualification assumed.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C069 Saved research record

Qualified long-term-care status requires the separate §7702B predicates, including qualified services, the specified Medicare coordination, guaranteed renewability, restrictions on cash/borrowing/assignment values, premium-refund treatment, and consumer-protection requirements. Section 7702B(e) separates the rider portion and denies a §213 deduction for the specified value-funded charge. Issuance of a qualified rider, or adding provisions needed to conform another long-term-care rider, is not a modification/material change for §§101(f), 7702, or 7702A under the enactment note.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S011, §7702B(b), (c), (e), (g); P.L. 104-191 §321(f)(4). Incorporated qualification standards and actual eligibility remain unestablished.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C070 Saved research record

For §72(e) inclusion, all MECs issued by the same company to the same policyholder during a calendar year are one MEC; annuities have a corresponding aggregation rule. The rule excludes §72(e)(5)(D) contracts. Additional anti-abuse rules require regulations; “all related contracts everywhere” is not the text. For annuities, the 1988 subsection-(d) amendments apply to contracts entered into after October 21, 1988.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(e)(12)(A)–(B); S002, P.L. 100-647 §5012(e)(5); 1989 calendar-year amendment note.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001", "R036-P1-S002"]}
R036-P1-C071 Saved research record

An individual’s transfer of an annuity without full and adequate consideration has a separate deemed-receipt rule for cash surrender value exceeding investment, with the §1041(a) exception and a transferee investment increase for the amount included. This is not automatically the rule for a collateral assignment of a life contract.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(e)(4)(C)(i)–(iii). Full gift/divorce analysis excluded.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C072 Saved research record

For a transfer for value whose transferee basis is not determined by reference to the transferor’s basis, §72(g) uses actual consideration plus subsequent transferee premiums/consideration, specified transferee prior receipts, and the transferee’s annuity starting date. “Transferee” includes its beneficiary or estate. A pledge alone does not establish all these transfer-for-value predicates.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(g)(1)–(3), concluding sentence.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C073 Saved research record

Amounts actually received as an annuity are governed by §72(a)–(c), including the investment/expected-return framework and annuity-starting-date definition, rather than automatically by nonannuity withdrawal ordering. Qualifying partial annuitization for ten years or more or one or more lives creates a separate portion, pro rata investment allocation, and separate starting date; the 2010 amendment applies to taxable years beginning after December 31, 2010.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(a)–(c), P.L. 111-240 §2113(b); S012, §1.72-2(b). Historical annuity-starting-date rules and actuarial tables are not calculated or certified here.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C074 Saved research record

A nonannuity amount received on or after the annuity starting date is generally included under §72(e)(2)(A), subject to the applicable statutory exceptions, including the full-refund/surrender rule in C061. The pre-start loan/ordering analysis cannot simply be copied to every post-start event.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(e)(2)(A), (5)(A), (5)(E).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C075 Saved research record

If a contract provides a full-discharge lump sum with an annuity option, the option is exercised within 60 days after the lump sum first becomes payable, and some or all would otherwise be included under §72(e)(1), §72(h) prevents inclusion merely when that lump sum first becomes payable.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(h)(1)–(3). No exercise or deadline determined.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C076 Saved research record

Interest payments on an amount held under an agreement to pay interest are income notwithstanding other §72 provisions. That recipient interest is distinct from interest charged on a policy borrowing.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(j).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C077 Saved research record

Qualified-plan/IRA contracts have expressly separate §72(e)(5)(D)/(8) treatment. Section 72(p)(5) treats a loan, assignment, or pledge of a contract purchased under a qualified employer plan as a plan loan. These boundaries prevent importing the independent-policy analysis into a retirement arrangement or importing retirement-plan loan limits into this component.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(e)(5)(D), (8), (p)(1), (5). The separate retirement-plan-loan report was not used or regenerated.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C078 Saved research record

If a taxpayer receives an amount under a MEC, §72(v)(1) increases tax for the receipt year by 10% of the portion included in gross income, subject to its exceptions. The base is not automatically gross cash, original borrowing, death benefit, or outstanding principal.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(v)(1), read with (e)(4)(A), (10) for deemed receipts. uscode.house.gov

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C079 Saved research record

The age exception applies to a distribution made on or after the date the taxpayer attains 59½. The insured’s age, contract age, or another role’s age does not establish this predicate.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(v)(2)(A).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C080 Saved research record

The disability exception requires the distribution to be attributable to the taxpayer’s becoming disabled within §72(m)(7): inability to engage in any substantial gainful activity because of a medically determinable physical or mental impairment expected to result in death or to be long-continued and indefinite, with proof in the form and manner required by the Secretary.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(v)(2)(B), (m)(7). No disability or medical fact inferred.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C081 Saved research record

The periodic-payment exception requires a distribution to be part of substantially equal periodic payments, at least annually, for the taxpayer’s life/life expectancy or the joint lives/joint life expectancies of the taxpayer and beneficiary. A single withdrawal, a repayment schedule, or the insurer’s installment label does not establish this exception.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(v)(2)(C). No payment method, life-expectancy calculation, or modification conclusion supplied.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C082 Saved research record

The retrieved §72(v)(2) contains the three exceptions in C079–C081. It does not contain §72(q)’s separate death, immediate-annuity, pre-1982-investment, or other listed exceptions. Nor does a reporting code establish a new statutory exception. This does not imply that a death payment is necessarily taxable; §101 must first be addressed.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(v)(2), compared with (q)(2); S006, §101(a).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C083 Saved research record

For an annuity, §72(q) has its own 10%-of-includible-amount rule and exceptions: taxpayer age 59½; holder’s death or specified primary-annuitant death; disability; qualifying periodic payments; specified qualified arrangements; pre-August 14, 1982 investment; a qualifying funding asset; amounts governed by §72(t); an immediate annuity; and the specified employer-purchased contract following plan termination. These are annuity boundaries, not MEC exceptions.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(q)(1)–(2)(A)–(J), (s)(6)(B), (u)(4). An immediate annuity requires a single premium/consideration, starting within one year, and substantially equal payments at least annually.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C084 Saved research record

Section 72(q)(3) expressly addresses subsequent modification of qualifying periodic payments, other than death/disability, before age 59½ or within the specified five-year period after payments begin, with recapture and deferral interest. Its §1035-exchange exception requires combined distributions to continue satisfying the periodic-payment requirement. The relevant exchange amendment applies to exchanges after December 31, 2023, with an express no-inference rule for earlier law.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(q)(3)(A)–(B); P.L. 117-328 div. T §323(e). This annuity recapture text is not automatically imported into §72(v).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C085 Saved research record

An annuity held by a nonnatural person can fall under §72(u)’s current ordinary-income regime rather than ordinary annuity deferral, subject to the natural-person-agent rule and the express estate-at-death, qualified-arrangement, qualified-funding-asset, employer-termination-contract, and immediate-annuity exceptions. Its enactment applicability concerns contributions after February 28, 1986.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S001, §72(u)(1)–(4); P.L. 99-514 §1135(b). No entity, ownership, or annual-income computation established.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C086 Saved research record

Unresolved authority issue: the 2026 Form 1099-R code notes refer to modifying substantially equal periodic payments under §72(q), (v), or (t) before five years, even after age 59½. The retrieved §72(v) has no express recapture paragraph corresponding to §72(q)(3). The instruction supports its stated reporting direction; it does not, by itself, establish the substantive §72(v) recapture base, interest, or legal authority.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S019, Table 1, code 1 and code 7 notes; S001, §72(v), compared with (q)(3). No independent published authority resolving this issue was established in this investigation. Internal Revenue Service +1

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["reporting_fields_and_codes"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001"]}
R036-P1-C087 Saved research record

Section 264(a)(2) denies deductions for amounts paid/accrued on debt incurred or continued to purchase or carry a single-premium life, endowment, or annuity contract. For this purpose, substantially all premiums within four years of purchase, or a post-March 1, 1954 deposit funding a substantial number of future premiums, can make a contract single-premium. The annuity application of (a)(2) is limited to contracts purchased after March 1, 1954.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S004, §264(a)(2), concluding applicability sentence, (c)(1)–(2). uscode.house.gov

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004"]}
R036-P1-C088 Saved research record

For contracts purchased after August 6, 1963, §264(a)(3) addresses purchase/carry debt under a plan contemplating systematic direct or indirect borrowing of cash-value increases, from the insurer or otherwise, excluding single-premium contracts already covered by (a)(2).

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S004, §264(a)(3), concluding applicability sentence.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004"]}
R036-P1-C089 Saved research record

The four §264(d) exceptions apply to (a)(3): no debt financing of any part of four annual premiums due during the specified seven-year period; otherwise-disallowed annual paid/accrued amounts no more than $100; debt arising from an unforeseen substantial income loss or financial-obligation increase; or trade/business debt. A substantial premium increase restarts that seven-year period when the first increased premium is paid.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S004, §264(d)(1)–(4), concluding sentence. These exceptions do not erase (a)(2), (a)(4), or §163.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004"]}
R036-P1-C090 Saved research record

Section 264(a)(4) separately denies interest deductions on indebtedness with respect to taxpayer-owned life policies covering any individual, or taxpayer-owned endowment/annuity contracts covering any individual, subject to subsection (e). Its purchase-date boundary is after June 20, 1986. It is not conditioned on MEC status.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S004, §264(a)(4), concluding applicability sentence; P.L. 99-514 §1003(c).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004"]}
R036-P1-C091 Saved research record

The key-person exception removes the (a)(4) bar only to the extent aggregate relevant indebtedness for policies/contracts covering the key individual does not exceed $50,000. This is neither a tax-free loan allowance nor a contractual borrowing ceiling. Other deduction restrictions remain.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S004, §264(e)(1).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004"]}
R036-P1-C092 Saved research record

A key person is an officer or 20-percent owner, with the permitted number capped at the greater of five or the lesser of 5% of officers/employees and twenty. Corporate ownership uses direct stock or voting ownership; other entities use capital/profits interests. Controlled-group aggregation applies to the stated ownership test and $50,000 limit, with allocation as prescribed.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S004, §264(e)(3)–(5). Incorporated §§52 and 414 business-group application remains outside the completed component.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004"]}
R036-P1-C093 Saved research record

The key-person/pre-1986 deduction allowance is further capped for months beginning after December 31, 1995 by the monthly corporate-bond benchmark specified in §264(e)(2). For contracts purchased on/before June 20, 1986, fixed-rate contracts use the purchase-month benchmark; variable-rate contracts use the third month before the applicable period. That period is normally successive twelve-month periods, with the statutory shorter-period election, historical 90-day election requirement, and consent-to-revoke condition.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S004, §264(e)(2)(A)–(B). No benchmark lookup, historical election, interest rate, or deduction amount established.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004"]}
R036-P1-C094 Saved research record

Section 264(f) has a separate proportional interest-disallowance regime based on average unborrowed policy cash values for specified post-June 8, 1997 contracts relative to the stated asset denominator. Its unborrowed-value measure generally subtracts loans from cash surrender value determined without surrender charges, with an alternative valuation rule if that does not reasonably approximate actual value.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S004, §264(f)(1)–(3), (7). This is a third distinct value measure; no averaging convention or business deduction is computed.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004"]}
R036-P1-C095 Saved research record

Section 264(f)’s exceptions and coordination matter: specified single-insured business contracts, the owner-and-spouse allowance, §72(u) annuities, qualifying separate master-contract coverage, natural-person ownership, and insurance-company exclusions. The natural-person exception has a business-beneficiary override, with sole-proprietorship/employee-business exclusions and a benefit cap. Partnerships/S corporations are tested at entity level; controlled-group aggregation and coordination with §§264(a), 265, and 263A apply.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S004, §264(f)(4)–(8), read completely. Full incorporated business-tax analysis remains excluded.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004"]}
R036-P1-C096 Saved research record

Premium deduction and interest deduction are separate questions. Section 264(a)(1) denies premiums where the taxpayer is directly or indirectly a beneficiary, subject to the specified annuity exceptions in (b). A premium’s inclusion in §72 investment does not itself create a deduction.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S004, §264(a)(1), (b); S001, §72(e)(6).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004", "R036-P1-S001"]}
R036-P1-C097 Saved research record

The 1996 amendments generally apply to interest paid/accrued after October 13, 1995, with a historical transition ending before January 1, 1999 for specified earlier debt. The 1997 amendments generally apply to contracts issued after June 8, 1997, in taxable years ending afterward; material death-benefit increases or other material changes can make a contract new for that transition, and added lives under a master contract have the stated separate treatment.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S004, P.L. 104-191 §501(c); S006, P.L. 105-34 §1084(d). Historical transition qualification requires the original debt dates, specified interest cap, aggregation, insured-count limit, and annual percentages; none is applied to current interest.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004"]}
R036-P1-C098 Saved research record

The historical four-year income-spreading provision concerns otherwise-taxable amounts under specified §264(a)(4) contracts on complete surrender/redemption/maturity, or a qualifying full-discharge refund, during 1996, 1997, or 1998. It is not a general current surrender or lapse spreading rule. The associated historical premium-test provision also has its own express lapse predicate and former-subsection references.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S004, P.L. 104-191 §501(d)(1)–(2), as amended. No present relief inferred from the note’s continued display.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004"]}
R036-P1-C099 Saved research record

Even if a §264 bar does not apply, §163 remains a separate gate. Section 163(a)’s general interest rule is limited by §163(h)’s prohibition of personal-interest deductions for noncorporate taxpayers and applicable exceptions. An exception to a disallowance is not affirmative proof of deductibility.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S005, §163(a), (h)(1)–(2); S004. Full deduction tracing and all §163 exceptions remain held.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S004"]}
R036-P1-C100 Saved research record

These tax provisions establish inclusion, exclusion, and deduction conditions. They do not supply a contractual right to borrow, an insurer’s repayment terms, protection against lapse, or a suitability recommendation. A deduction limitation is not a prohibition on borrowing.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
Scope of S001, S003–S005; contractual/insurance-law analysis expressly excluded by the parent holds.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S001", "R036-P1-S004"]}
R036-P1-C101 Saved research record

Section 1035 permits specified exchanges: life to life/endowment/annuity/qualified long-term-care; endowment to qualifying endowment with payments beginning no later, annuity, or qualified long-term-care; annuity to annuity or qualified long-term-care; qualified long-term-care to qualified long-term-care. It does not list annuity-to-life as a permitted direction. Section-specific definitions and the foreign-person limitation remain relevant.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S007, §1035(a)–(c). No replacement transaction recommended or assumed.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["exchange_regulation_and_reporting"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C102 Saved research record

The read final regulation requires the same insured for insurance exchanges and the same obligee or obligees for annuity exchanges. An ownership/insured change is not automatically a qualifying exchange merely because another contract is acquired.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S015, §1.1035-1; current statutory categories in S007 control later additions. Original regulatory issuance-date gap remains recorded.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["exchange_regulation_and_reporting"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C103 Saved research record

Money, other property, and liability assumption can prevent complete nonrecognition. Through §1035(d), §1031(b)–(d) supplies gain-recognition, no-loss, basis, and liability-as-money rules. The incorporated §357(d) definition treats recourse and nonrecourse liabilities differently and requires the specified agreement, expected-payment, collateral, and allocation facts.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S007, §1035(d); S008, §1031(b)–(d); S009, §357(d)(1)–(3). No automatic conclusion that every loan balance is taxable “boot.”

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["exchange_regulation_and_reporting"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C104 Saved research record

A qualifying §1035 exchange generally carries the prescribed adjusted investment/basis framework rather than resetting everything to a new cash premium. Separately, §7702A(a)(2) preserves MEC classification through successive exchanges. Income nonrecognition and MEC status are different questions.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S007, §1035(d); S008, §1031(d); S002, §7702A(a)(2).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["exchange_regulation_and_reporting"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C105 Saved research record

Section 101’s death-payment exclusion is subject to its own exceptions and limits, including transfer-for-value/reportable-sale rules and separate interest treatment. A MEC still satisfies §7702 by definition, so MEC status alone does not establish the death benefit’s tax result. No beneficiary, death, ownership, transfer, or employer facts are supplied.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S006, §101(a), (c), (d), (f); S002, §7702A(a); S003, §7702(g)(2). Full death-benefit, estate, gift, and employment analysis remains held.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": ["R036-P1-S002"]}
R036-P1-C106 Saved research record

Section 6047(d) authorizes/requires the specified issuer reporting for contracts from which designated distributions may be made, as prescribed. Its $10 aggregate annual threshold is a reporting provision, not an income exclusion. Section 6047(g) coordinates with information required under §6050Y.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S021, §6047(d)(1)–(2), (g). Actual filer/event status and full reporting rules remain unestablished.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C107 Saved research record

For §3405 withholding, “commercial annuity” expressly includes a life-insurance or endowment contract issued by a state-licensed insurance company. That withholding definition does not reclassify every life contract as an annuity for §72’s substantive treatment. Designated distributions, exclusions, payor responsibility, and the cash/property withholding limitation require their own predicates.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S022, §3405(d), (e)(1), (6), (8). No withholding election, rate, or obligation determined.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C108 Saved research record

Amounts withheld under chapter 24 are credited under §31(a); withholding is not itself the final income-tax liability.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
S020, §31(a)(1)–(2).

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C109 Saved research record

The inspected 2026 instructions identify box 1 as gross distribution, 2a as taxable amount, 2b as relevant determination/distribution checkboxes, 4 as federal income tax withheld, 5 as the specified contributions/premiums recovered, and 7a as distribution codes. The 2026 renumbering must not be silently replaced by an older box-number convention.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S019, “What’s New,” and instructions for those boxes. This describes instructions actually read, not a completed form.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["reporting_fields_and_codes"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C110 Saved research record

The instructions direct reporting of matured/redeemed insurance and annuity payments, but state that a life-insurance surrender need not be reported on Form 1099-R when it is reasonable to believe none of the payment is includible. This conditional instruction does not establish that an actual surrender occurred or that any actual payer met the belief predicate.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S019, “Life insurance, annuity, and endowment contracts.”

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["exchange_regulation_and_reporting", "reporting_fields_and_codes"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C111 Saved research record

A qualifying §1035 exchange can be reportable despite nonrecognition. The instructions separately address loan cancellation or other property and provide the stated within-company exception where the transaction is solely an exchange, no designated distribution occurs, and adequate basis records are maintained.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S019, “Section 1035 exchange.” This reporting exception is not the substantive qualification test.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["exchange_regulation_and_reporting", "reporting_fields_and_codes"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C112 Saved research record

In the inspected code table, L is for deemed distributions under §72(p), not every policy loan. Code 6 addresses §1035 exchanges; code 7 includes the stated life/annuity/endowment and failed-§7702 reporting; W addresses qualifying §72(e)(11) long-term-care charges. A code does not prove qualification, income amount, or an additional-tax exception.

Recorded check status: reconciled with selected primary checks and retained subclaim limits

Exact authority and scope
S019, Table 1, codes 6, 7, L, W; see unresolved code-note issue C086. Internal Revenue Service

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": ["reporting_fields_and_codes"], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}
R036-P1-C113 Saved research record

No actual information return, withholding entry, payer determination, or tax return has been supplied. Therefore this investigation establishes conditional reporting functions only; it does not establish an actual filing duty, taxable box amount, withholding liability, or final tax bill.

Recorded check status: reconciled original attribution or held branch not freshly verified

Exact authority and scope
Application limits of S019–S022, and the user’s held facts.

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "selected_evidence_groups": [], "all_original_holds_retained": true, "new_material_correction_pending": false, "underlying_statute_72_7702A_264_not_freshly_verified": []}

Sources, pinpoints and access limits

Keep the source version, actual read extent and jurisdiction with the proposition. A link or researcher access claim is not a substitute for an operative primary passage.

R036-P1-S001 Saved research record

Congress; OLRC, 26 U.S.C. §72, Annuities; certain proceeds of endowment and life insurance contracts. https://uscode.house.gov/us/usc/119-124/t26/s72/

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Retrieved text through P.L. 119-124, October 15, 2026. Statute as amended; applicable historical and transition provisions must be selected separately.
Actual read bounds, precise pinpoints, and limits
Read complete (a)–(c), (e)(1)–(12), (f), (g), (h), (j), (l), (m)(7), (q), (u), and (v); selected (p)(1), (p)(5), and (s)(6)(B) for boundaries only. Read material amendment/effective-date notes concerning 1982, 1984, 1986, 1988–1989, 1996, 2006, 2010, and the relevant 2022 annuity amendment. Not a whole-§72 or whole-notes read. uscode.house.gov +2
Direct source URLs
https://uscode.house.gov/us/usc/119-124/t26/s72/
https://uscode.house.gov/us/usc/119-124/t26/s72/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Original later direct failure of supplied§72literal protected without retry; no separate retained successful(e)/(v)native body found through coordination. Original relevant statutory assertions stay attributed/unverified freshly. IRSruling/regulation quotations corroborate only their exact passages, not a fresh§72body. No statute edition/host/query variant or Work/Codex generation.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S002 Saved research record

Congress; OLRC, 26 U.S.C. §7702A, Modified endowment contract defined. https://uscode.house.gov/us/usc/119-121/t26/s7702A/

Recorded check status: fresh literal access failed once original attribution retained

Version, legal status, and effectiveness
Retrieved text through P.L. 119-121, October 9, 2026. Added by P.L. 100-647, §5012(c), November 10, 1988; substantive applicability generally begins with contracts entered into on or after June 21, 1988, subject to the reproduced transitions.
Actual read bounds, precise pinpoints, and limits
Whole section (a)–(e), source credit, amendments, effective-date notes, and 2002 construction note read. Particularly §§7702A(a), (c)(2)–(6), (d), (e), and P.L. 100-647 §5012(e), as amended. uscode.house.gov
Direct source URLs
https://uscode.house.gov/us/usc/119-121/t26/s7702A/
https://uscode.house.gov/us/usc/119-121/t26/s7702A/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Supplied119-121§7702A URL failed once404. No retry/variant/workaround. Whole original definition/test/transition record retained as researcher-attributed; current MECclassification/sevenpay/aggregation/additionaltax conclusions not newly certified.", "fresh_selected_evidence": [], "new_failure_evidence": [{"packet": "[internal evidence reference]", "sha256": "dfb67d4ff40c020b8f6ede36a0c8d3fc0f0a6272aad5172caa30634dea9a4933", "chunk": 0, "URL": "https://uscode.house.gov/us/usc/119-121/t26/s7702A/", "packet_character_bounds_half_open": [0, 233], "returned_native_ranges": [], "access_failure": true, "search_miss": false, "actual_selected_lines_read": [], "metadata_navigation_or_unselected_only": true, "complete_native_block_retained": true, "parsed_text_not_pixels": true, "unmodified_failure": "Internal Error ()\nciteturn3168view0 [wordlim: 200] Source: open({\"ref_id\":\"https://uscode.house.gov/us/usc/119-121/t26/s7702A/\",\"lineno\":null}); \nFailed to fetch https://uscode.house.gov/us/usc/119-121/t26/s7702A/: (404) Not Found", "no_retry_variant_or_workaround_after_failure": true}], "all_original_holds_retained": true}
R036-P1-S003 Saved research record

Congress; OLRC, 26 U.S.C. §7702, Life insurance contract defined. https://uscode.house.gov/us/usc/119-124/t26/s7702/

Recorded check status: selected primary passages checked with holds

Version, legal status, and effectiveness
Retrieved text through P.L. 119-124, October 15, 2026. Added July 18, 1984. The 2020 interest-assumption amendments apply to contracts issued after December 31, 2020. Other applicability rules are detailed below.
Actual read bounds, precise pinpoints, and limits
Whole section (a)–(k), source credit, amendments, and displayed notes read. Material pinpoints: (b)–(f) qualification and measurements; (f)(7) benefit-reduction recapture; (g) failure; (i)–(j) special categories; P.L. 98-369 §221(d), P.L. 116-260 div. EE §205(e). uscode.house.gov +1
Direct source URLs
https://uscode.house.gov/us/usc/119-124/t26/s7702/
https://uscode.house.gov/us/usc/119-124/t26/s7702/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Fresh complete§7702a–k operative body and selected displayed amendment/applicability notes through462. Ten corridor rows, definitions, rate formula, reduction rules, qualification failure and church/legacy boundaries checked. Only selected note passages freshly read; remaining1984transition and807reserve note remain attributed. OLRCthroughPL119124Oct15 is not fullcurrentness or actuarial certificate.", "fresh_selected_evidence": [{"packet": "[internal evidence reference]", "sha256": "dfb67d4ff40c020b8f6ede36a0c8d3fc0f0a6272aad5172caa30634dea9a4933", "chunk": 1, "URL": "https://uscode.house.gov/us/usc/119-124/t26/s7702/", "packet_character_bounds_half_open": [314, 29586], "returned_native_ranges": [[0, 417]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[15, 380], [385, 417]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "1e092776dc22f31efaa1512ae643bfec716c9e463b453b52b287688388c07c14", "chunk": 0, "URL": "https://uscode.house.gov/us/usc/119-124/t26/s7702/", "packet_character_bounds_half_open": [0, 2163], "returned_native_ranges": [[431, 448]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[431, 448]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "c7c9eb5bb21c758620e5e57b4dc781b75f612940307c87ca2fd293dfc2c9443b", "chunk": 0, "URL": "https://uscode.house.gov/us/usc/119-124/t26/s7702/", "packet_character_bounds_half_open": [0, 6754], "returned_native_ranges": [[403, 462]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[423, 462]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S004 Saved research record

Congress; OLRC, 26 U.S.C. §264, Certain amounts paid in connection with insurance contracts. https://uscode.house.gov/us/usc/119-134/t26/s264/

Recorded check status: fresh literal access failed once original attribution retained

Version, legal status, and effectiveness
Retrieved text through P.L. 119-134, October 20, 2026. Current statutory body includes separate purchase-date rules and historical transition provisions.
Actual read bounds, precise pinpoints, and limits
Whole section (a)–(f), source credit, amendments, and displayed notes read. §§264(a)(2)–(4), (c)–(f), and P.L. 104-191 §501(c)–(d) are material. Full business-deduction application remains excluded. uscode.house.gov
Direct source URLs
https://uscode.house.gov/us/usc/119-134/t26/s264/
https://uscode.house.gov/us/usc/119-134/t26/s264/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Supplied119-134§264URL returned not accessible once. All original deduction/exception/ownership/rate/historical-transition claims retained attributed, not newly verified. No alternateedition/host/query retry, no actual interest deduction or business application.", "fresh_selected_evidence": [], "new_failure_evidence": [{"packet": "[internal evidence reference]", "sha256": "dfb67d4ff40c020b8f6ede36a0c8d3fc0f0a6272aad5172caa30634dea9a4933", "chunk": 2, "URL": "https://uscode.house.gov/us/usc/119-134/t26/s264/", "packet_character_bounds_half_open": [29668, 29901], "returned_native_ranges": [], "access_failure": true, "search_miss": false, "actual_selected_lines_read": [], "metadata_navigation_or_unselected_only": true, "complete_native_block_retained": true, "parsed_text_not_pixels": true, "unmodified_failure": "Internal Error ()\nciteturn3168view2 [wordlim: 200] Source: open({\"ref_id\":\"https://uscode.house.gov/us/usc/119-134/t26/s264/\",\"lineno\":null}); \nURL https://uscode.house.gov/us/usc/119-134/t26/s264/ is not accessible via this tool.", "no_retry_variant_or_workaround_after_failure": true}], "all_original_holds_retained": true}
R036-P1-S005 Saved research record

Congress; OLRC, 26 U.S.C. §163, Interest. https://uscode.house.gov/us/usc/119-134/t26/s163/

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Retrieved text through P.L. 119-134, October 20, 2026.
Actual read bounds, precise pinpoints, and limits
Selected (a), (h)(1), and (h)(2) read for the separate deduction gate. Not a complete §163, investment-interest, business-interest, residence-interest, or other personal-interest-exception analysis. uscode.house.gov
Direct source URLs
https://uscode.house.gov/us/usc/119-134/t26/s163/
https://uscode.house.gov/us/usc/119-134/t26/s163/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S006 Saved research record

Congress; OLRC, 26 U.S.C. §101, Certain death benefits. https://uscode.house.gov/us/usc/119-134/t26/s101/

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Retrieved text through P.L. 119-134, October 20, 2026.
Actual read bounds, precise pinpoints, and limits
Read (a)–(f), with (f)’s concluding clauses separately completed. Used (a), (c), and (d) only as death-benefit boundaries; read (f) completely for pre-1985 flexible-premium predicates. Read P.L. 105-34 §1084(d) note concerning post-June 8, 1997 contracts and material changes. Not a complete death-benefit or employer-owned-insurance analysis. uscode.house.gov +2
Direct source URLs
https://uscode.house.gov/us/usc/119-134/t26/s101/
https://uscode.house.gov/us/usc/119-134/t26/s101/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S007 Saved research record

Congress; OLRC, 26 U.S.C. §1035, Certain exchanges of insurance policies. https://uscode.house.gov/us/usc/119-134/t26/s1035/

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Retrieved text through P.L. 119-134, October 20, 2026. Long-term-care exchange amendments apply to exchanges after December 31, 2009.
Actual read bounds, precise pinpoints, and limits
Whole (a)–(d), source/amendment/effective-date notes read. Foreign-person regulatory limitation identified but not developed. uscode.house.gov
Direct source URLs
https://uscode.house.gov/us/usc/119-134/t26/s1035/
https://uscode.house.gov/us/usc/119-134/t26/s1035/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S008 Saved research record

Congress; OLRC, 26 U.S.C. §1031, Exchange of real property held for productive use or investment, incorporated provisions. https://uscode.house.gov/us/usc/119-134/t26/s1031/

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Retrieved text through P.L. 119-134, October 20, 2026.
Actual read bounds, precise pinpoints, and limits
Read complete (b)–(d) because §1035(d) incorporates them. No real-estate exchange timing rules applied. Not a whole-section/history read. uscode.house.gov
Direct source URLs
https://uscode.house.gov/us/usc/119-134/t26/s1031/
https://uscode.house.gov/us/usc/119-134/t26/s1031/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S009 Saved research record

Congress; OLRC, 26 U.S.C. §357, Assumption of liability, incorporated definition. https://uscode.house.gov/us/usc/119-134/t26/s357/

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Retrieved text through P.L. 119-134, October 20, 2026.
Actual read bounds, precise pinpoints, and limits
Read complete (d)(1)–(3) for the liability-assumption definition incorporated by §1031(d). Corporate-transfer treatment and complete historical applicability not investigated. uscode.house.gov
Direct source URLs
https://uscode.house.gov/us/usc/119-134/t26/s357/
https://uscode.house.gov/us/usc/119-134/t26/s357/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S010 Saved research record

Congress; OLRC, 26 U.S.C. §817, Treatment of variable contracts. https://uscode.house.gov/us/usc/119-134/t26/s817/

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Retrieved text through P.L. 119-134, October 20, 2026.
Actual read bounds, precise pinpoints, and limits
Read complete (d) and (h) for variable-contract and diversification boundaries. Treas. Reg. §1.817-5 and underlying asset qualification were not comprehensively investigated. uscode.house.gov
Direct source URLs
https://uscode.house.gov/us/usc/119-134/t26/s817/
https://uscode.house.gov/us/usc/119-134/t26/s817/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S011 Saved research record

Congress; OLRC, 26 U.S.C. §7702B, Treatment of qualified long-term care insurance. https://uscode.house.gov/us/usc/119-134/t26/s7702B/

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Retrieved text through P.L. 119-134, October 20, 2026. Includes 1996 enactment and 2006 coordination notes.
Actual read bounds, precise pinpoints, and limits
Read (b), (c), (e), (g) and material displayed notes, including P.L. 104-191 §321(f)(4). No medical-status determination, state-law qualification investigation, or complete reading of incorporated insurance model standards. uscode.house.gov +1
Direct source URLs
https://uscode.house.gov/us/usc/119-134/t26/s7702B/
https://uscode.house.gov/us/usc/119-134/t26/s7702B/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S012 Saved research record

Treasury; eCFR, Treas. Reg. §1.72-2, Applicability of section 72. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR807fc2326e73cb3/section-1.72-2

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Codified final regulation; retrieved eCFR status through October 22, 2026. Source history includes T.D. 6500, November 26, 1960; T.D. 6497, October 20, 1960; T.D. 6885, June 2, 1966.
Actual read bounds, precise pinpoints, and limits
Read (a)(1)–(2), (b)(1)–(3) and source note. Used for annuity/nonannuity boundary, subject to later statutes. Original Treasury-decision preambles and all historical effectiveness provisions not read. ecfr.gov +1
Direct source URLs
https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR807fc2326e73cb3/section-1.72-2
https://www.ecfr.gov/current/title-26/section-1.72-2?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S013 Saved research record

Treasury; eCFR, Treas. Reg. §1.72-11, Amounts not received as annuity payments. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR807fc2326e73cb3/section-1.72-11

Recorded check status: selected primary passages checked with holds

Version, legal status, and effectiveness
Codified final regulation; retrieved status through October 16, 2026. Source history includes T.D. 6500, November 26, 1960; T.D. 6885, June 2, 1966; T.D. 8115, December 19, 1986.
Actual read bounds, precise pinpoints, and limits
Whole (a)–(h) and source note read. Material surrender provision (d)(1)–(2). Historical caps and obsolete cross-references were not treated as overriding amended §72. Full original-decision effectiveness audit not performed. ecfr.gov +2
Direct source URLs
https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR807fc2326e73cb3/section-1.72-11
https://www.ecfr.gov/current/title-26/section-1.72-11?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Fresh selected complete(d) surrender/redemption/maturity provision only; neither whole1.72-11 nor its operative era/history freshly certified. Oldstatutorycrossreferences/caps and laterannuity distinctions retained; cannot substitute it for current72held body. No PDFpixels.", "fresh_selected_evidence": [{"packet": "[internal evidence reference]", "sha256": "c7c9eb5bb21c758620e5e57b4dc781b75f612940307c87ca2fd293dfc2c9443b", "chunk": 3, "URL": "https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFR807fc2326e73cb3/section-1.72-11", "packet_character_bounds_half_open": [18878, 30509], "returned_native_ranges": [[111, 113], [154, 189], [217, 217]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[167, 172]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S014 Saved research record

Treasury, Treas. Reg. §1.7702-2, Attained age of the insured under a life insurance contract; T.D. 9287. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRc1c6d714d9aed32/section-1.7702-2. Same instrument in https://www.irs.gov/irb/2006-46_IRB.

Recorded check status: selected primary passages checked with holds

Version, legal status, and effectiveness
Final T.D. 9287, September 13, 2006, 71 FR 53970; effective that day, with distinct contract applicability under paragraph (f). First retrieved eCFR snapshot through October 13, 2026. IRB publication November 13, 2006.
Actual read bounds, precise pinpoints, and limits
Whole regulation (a)–(f), including examples and applicability, read. Selected T.D. preamble/version material read in IRB, not the whole bulletin. These formats are one instrument, not independent corroboration. ecfr.gov +1
Direct source URLs
https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRc1c6d714d9aed32/section-1.7702-2
https://www.irs.gov/irb/2006-46_IRB
https://www.irs.gov/irb/2006-46_IRB?utm_source=chatgpt.com
https://www.ecfr.gov/current/title-26/section-1.7702-2?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Fresh complete1.7702-2a–f body including six source-native examples read across exact packets; no new example computation. eCFRdisplayOct23lastamendedOct19, not fullamendmentaudit. Source-noteTD9287date visible; IRBpreamble/originaleffectivehistory not freshly reopened.", "fresh_selected_evidence": [{"packet": "[internal evidence reference]", "sha256": "a7410b78f27168f2f3953b546a6e944dcbd65cb37dad9a394aec0c43d806df97", "chunk": 2, "URL": "https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRc1c6d714d9aed32/section-1.7702-2", "packet_character_bounds_half_open": [12887, 19652], "returned_native_ranges": [[0, 113]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[67, 69], [98, 113]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "5fb878b371dafbe5cc1067743ba0f2186b87753ac5c94826526cc0415689479d", "chunk": 2, "URL": "https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRc1c6d714d9aed32/section-1.7702-2", "packet_character_bounds_half_open": [18706, 27883], "returned_native_ranges": [[115, 188]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[115, 157]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "c7c9eb5bb21c758620e5e57b4dc781b75f612940307c87ca2fd293dfc2c9443b", "chunk": 1, "URL": "https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRc1c6d714d9aed32/section-1.7702-2", "packet_character_bounds_half_open": [6836, 13534], "returned_native_ranges": [[101, 131]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[101, 115]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S015 Saved research record

Treasury; eCFR, Treas. Reg. §1.1035-1, Certain exchanges of insurance policies. https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRbf83dcc4bd89326/section-1.1035-1

Recorded check status: selected primary passages checked with holds

Version, legal status, and effectiveness
Codified final regulation; retrieved status through October 23, 2026. Original issuance/effective date not verified in the retrieved section.
Actual read bounds, precise pinpoints, and limits
Whole section text read. Same-insured/same-obligee and money/other-property provisions used. Its older exchange-category wording was read with current §1035, including later long-term-care amendments. ecfr.gov
Direct source URLs
https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRbf83dcc4bd89326/section-1.1035-1
https://www.ecfr.gov/current/title-26/section-1.1035-1?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Fresh whole1.1035-1operativebody; sameinsured/sameobligees, money/otherproperty andbasisincorporations checked. Olderexchangecategories held against laterstatutory framework, current1035/1031/357bodies not freshlyverified. Originalissuance/effectivenessgap remains. eCFRdisplayOct26lastamendedOct26notfullhistoryaudit.", "fresh_selected_evidence": [{"packet": "[internal evidence reference]", "sha256": "c7c9eb5bb21c758620e5e57b4dc781b75f612940307c87ca2fd293dfc2c9443b", "chunk": 2, "URL": "https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRbf83dcc4bd89326/section-1.1035-1", "packet_character_bounds_half_open": [13616, 18796], "returned_native_ranges": [[0, 105]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[67, 69], [98, 105]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "e212d9246607efed83276208a8d9ba6a1af86d1d9f12c5523dfdb7ef46f45348", "chunk": 0, "URL": "https://www.ecfr.gov/current/title-26/chapter-I/subchapter-A/part-1/subject-group-ECFRbf83dcc4bd89326/section-1.1035-1", "packet_character_bounds_half_open": [0, 5808], "returned_native_ranges": [[33, 141]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[67, 69], [98, 110]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S016 Saved research record

IRS, Rev. Rul. 2009-13. https://www.irs.gov/pub/irs-drop/rr-09-13.pdf. Published in https://www.irs.gov/irb/2009-21_IRB.

Recorded check status: selected primary passages checked with holds

Version, legal status, and effectiveness
Published IRS interpretation, 2009-21 I.R.B. 1029, May 26, 2009. Modified by S017; not relied on as an unmodified instrument.
Actual read bounds, precise pinpoints, and limits
All 12 PDF pages read as parsed text, indexes 0–11. Surrender analysis: printed pp. 3–5 / indexes 2–4; holding 1: printed p. 11 / index 10. Its surrender situation has no outstanding loan or prior withdrawals. No PDF-pixel inspection claimed; no case opinions investigated. irs.gov +1
Direct source URLs
https://www.irs.gov/pub/irs-drop/rr-09-13.pdf
https://www.irs.gov/irb/2009-21_IRB
https://www.irs.gov/pub/irs-drop/rr-09-13.pdf?utm_source=chatgpt.com
https://www.irs.gov/irb/2009-21_IRB?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Fresh selectedSituation1facts andprintedpp3–5/PDFindices2–4surrenderanalysis only. Originalall12pagesread remainsresearcher-attributed, freshnoall12claim. No policyloan/priorwithdrawal inrulingfacts; ordinaryincome/cost treatmentnotuniversalindebtedlapse. Rulingmodifiedstatusreadseparately, underlyingcitedcasesunreopened.", "fresh_selected_evidence": [{"packet": "[internal evidence reference]", "sha256": "a7410b78f27168f2f3953b546a6e944dcbd65cb37dad9a394aec0c43d806df97", "chunk": 0, "URL": "https://www.irs.gov/pub/irs-drop/rr-09-13.pdf", "packet_character_bounds_half_open": [0, 6311], "returned_native_ranges": [[0, 76]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[0, 23], [35, 76]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "5fb878b371dafbe5cc1067743ba0f2186b87753ac5c94826526cc0415689479d", "chunk": 0, "URL": "https://www.irs.gov/pub/irs-drop/rr-09-13.pdf", "packet_character_bounds_half_open": [0, 12271], "returned_native_ranges": [[38, 175]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[38, 92]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S017 Saved research record

IRS, Rev. Rul. 2020-05. https://www.irs.gov/pub/irs-drop/rr-20-05.pdf. Published in https://www.irs.gov/irb/2020-09_IRB.

Recorded check status: selected primary passages checked with holds

Version, legal status, and effectiveness
Published IRS interpretation, 2020-9 I.R.B. 454, February 24, 2020. Its stated effective date is transactions on or after August 26, 2009.
Actual read bounds, precise pinpoints, and limits
All six PDF pages read as parsed text, indexes 0–5. Material modification discussion printed pp. 4–5 / indexes 3–4; effect on other documents and effective date printed p. 6 / index 5. Used to establish S016’s modified status, not to regenerate an asset-sale component. No pixel inspection. irs.gov +1
Direct source URLs
https://www.irs.gov/pub/irs-drop/rr-20-05.pdf
https://www.irs.gov/irb/2020-09_IRB
https://www.irs.gov/pub/irs-drop/rr-20-05.pdf?utm_source=chatgpt.com
https://www.irs.gov/irb/2020-09_IRB?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Fresh selected§1016amendment/modification/effectivedatebody printedpp4–6/indices3–5 andinitialdatecontext. Salesexamplesonlyretained unmodified, not developed as asset-sale component or new calculation. No whole6pagefreshread or judicialhistory/pixel claim.", "fresh_selected_evidence": [{"packet": "[internal evidence reference]", "sha256": "a7410b78f27168f2f3953b546a6e944dcbd65cb37dad9a394aec0c43d806df97", "chunk": 1, "URL": "https://www.irs.gov/pub/irs-drop/rr-20-05.pdf", "packet_character_bounds_half_open": [6393, 12805], "returned_native_ranges": [[0, 71]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[0, 21], [68, 71]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "5fb878b371dafbe5cc1067743ba0f2186b87753ac5c94826526cc0415689479d", "chunk": 1, "URL": "https://www.irs.gov/pub/irs-drop/rr-20-05.pdf", "packet_character_bounds_half_open": [12353, 18624], "returned_native_ranges": [[48, 50], [54, 121]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[68, 116]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S018 Saved research record

IRS, Publication 525 (2025), Taxable and Nontaxable Income. https://www.irs.gov/publications/p525

Recorded check status: selected primary passages checked with holds

Version, legal status, and effectiveness
Public explanatory publication, 2025 version; exact original issuance/revision day not established. It is not a statute or final regulation.
Actual read bounds, precise pinpoints, and limits
Selected “Life Insurance Proceeds,” especially complete “Surrender of policy for cash” paragraph, read. Not the whole publication. Its simplified treatment of unrepaid loans is qualified below; it does not establish all lapse scenarios. Internal Revenue Service
Direct source URLs
https://www.irs.gov/publications/p525
https://www.irs.gov/publications/p525?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Fresh complete2025cash-surrender paragraph only. Simplified unrepaid-loan cost wording remains guidance, not a universal debt/netproceeds/basis formula or everylapseevent. Exactissuance/versionhistoryheld, no wholepublication.", "fresh_selected_evidence": [{"packet": "[internal evidence reference]", "sha256": "1e092776dc22f31efaa1512ae643bfec716c9e463b453b52b287688388c07c14", "chunk": 1, "URL": "https://www.irs.gov/publications/p525", "packet_character_bounds_half_open": [2245, 11137], "returned_native_ranges": [[372, 394], [1053, 1060], [2471, 2490], [4229, 4288], [4458, 4508]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[2474, 2477]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S019 Saved research record

IRS, Instructions for Forms 1099-R and 5498 (2026). https://www.irs.gov/instructions/i1099r

Recorded check status: selected primary passages checked with holds

Version, legal status, and effectiveness
Public reporting instructions, 2026 version; exact issuance/revision day not established. A tax-year heading is not a substantive effective-date finding.
Actual read bounds, precise pinpoints, and limits
Read material body: life-insurance/annuity/endowment reporting; §1035 exchanges; boxes 1, 2a, 2b, 4, 5, 7a; relevant distribution-code entries and notes. Not whole instructions; no blank-form PDF or pixels inspected; no form completed. The §72(v) periodic-payment coding issue is explicitly unresolved below. Internal Revenue Service +3
Direct source URLs
https://www.irs.gov/instructions/i1099r
https://www.irs.gov/instructions/i1099r?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Fresh selected2026material instructions includinglifecontracts/1035, selectedfields2a/2b/4/5,7aboxrenumbering,codes1/2/6/7/L/Wandfiveyearmodificationnotes. No underlying72vrecaptureauthority/finaltax/actualfilingfinding; fullinstructions,formPDF,pixelsandfullreportingstatutesnotfreshlyverified. Exactrevisiondayheld.", "fresh_selected_evidence": [{"packet": "[internal evidence reference]", "sha256": "1e092776dc22f31efaa1512ae643bfec716c9e463b453b52b287688388c07c14", "chunk": 2, "URL": "https://www.irs.gov/instructions/i1099r", "packet_character_bounds_half_open": [11219, 17779], "returned_native_ranges": [[515, 519], [557, 557], [1051, 1079], [1148, 1148], [1156, 1159], [1167, 1167]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[1148, 1148], [1156, 1158], [1167, 1167]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "1e092776dc22f31efaa1512ae643bfec716c9e463b453b52b287688388c07c14", "chunk": 3, "URL": "https://www.irs.gov/instructions/i1099r", "packet_character_bounds_half_open": [17861, 30106], "returned_native_ranges": [[118, 172], [427, 444], [604, 622], [766, 774], [823, 829], [1163, 1164], [1675, 1677]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[430, 436], [772, 772], [1164, 1164]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "e212d9246607efed83276208a8d9ba6a1af86d1d9f12c5523dfdb7ef46f45348", "chunk": 1, "URL": "https://www.irs.gov/instructions/i1099r", "packet_character_bounds_half_open": [5890, 19008], "returned_native_ranges": [[387, 390], [392, 460]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[425, 438]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "e212d9246607efed83276208a8d9ba6a1af86d1d9f12c5523dfdb7ef46f45348", "chunk": 2, "URL": "https://www.irs.gov/instructions/i1099r", "packet_character_bounds_half_open": [19090, 32021], "returned_native_ranges": [[1118, 1190]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[1141, 1167], [1189, 1189]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "b1aaebeb6e03b64a54ca754759cb0711ce17deb73b059288cf14202389dfbb90", "chunk": 1, "URL": "https://www.irs.gov/instructions/i1099r", "packet_character_bounds_half_open": [1197, 2398], "returned_native_ranges": [[1208, 1211]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[1208, 1208]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "b1aaebeb6e03b64a54ca754759cb0711ce17deb73b059288cf14202389dfbb90", "chunk": 2, "URL": "https://www.irs.gov/instructions/i1099r", "packet_character_bounds_half_open": [2480, 27479], "returned_native_ranges": [[173, 181], [193, 201], [569, 569], [579, 579], [759, 777], [809, 990], [1028, 1028], [1036, 1040], [1584, 1595], [1602, 1602], [1628, 1629], [1669, 1669], [1685, 1698]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[763, 763], [772, 772], [816, 830], [929, 937], [987, 990], [1028, 1028], [1036, 1036]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}, {"packet": "[internal evidence reference]", "sha256": "b1aaebeb6e03b64a54ca754759cb0711ce17deb73b059288cf14202389dfbb90", "chunk": 3, "URL": "https://www.irs.gov/instructions/i1099r", "packet_character_bounds_half_open": [27561, 30331], "returned_native_ranges": [[97, 106], [314, 342]], "access_failure": false, "search_miss": false, "actual_selected_lines_read": [[319, 339]], "metadata_navigation_or_unselected_only": false, "complete_native_block_retained": true, "parsed_text_not_pixels": true}], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S020 Saved research record

Congress; OLRC, 26 U.S.C. §31, Tax withheld on wages, incorporated credit rule. https://uscode.house.gov/us/usc/119-134/t26/s31/

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Retrieved text through P.L. 119-134, October 20, 2026.
Actual read bounds, precise pinpoints, and limits
Complete (a)(1)–(2) read for crediting chapter 24 withholding. Not a return or tax-payment calculation. uscode.house.gov
Direct source URLs
https://uscode.house.gov/us/usc/119-134/t26/s31/
https://uscode.house.gov/us/usc/119-134/t26/s31/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S021 Saved research record

Congress; OLRC, 26 U.S.C. §6047, Returns relating to certain trusts and annuity plans. https://uscode.house.gov/us/usc/119-134/t26/s6047/

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Retrieved text through P.L. 119-134, October 20, 2026.
Actual read bounds, precise pinpoints, and limits
Selected complete (d)(1)–(2), (g), (h) and relevant source/amendment notes read. §6047(d)’s issuer reporting rule and §6050Y coordination identified; complete reporting obligations excluded. uscode.house.gov
Direct source URLs
https://uscode.house.gov/us/usc/119-134/t26/s6047/
https://uscode.house.gov/us/usc/119-134/t26/s6047/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S022 Saved research record

Congress; OLRC, 26 U.S.C. §3405, Special rules for pensions, annuities, and certain other deferred income. https://uscode.house.gov/us/usc/119-134/t26/s3405/

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Retrieved text through P.L. 119-134, October 20, 2026.
Actual read bounds, precise pinpoints, and limits
Read (a)–(e)(13). Relied on (d), (e)(1), (e)(6), and (e)(8) to distinguish reporting/withholding classification, payor duties, cash limitations, and substantive income treatment. No full withholding determination or rate calculation. uscode.house.gov
Direct source URLs
https://uscode.house.gov/us/usc/119-134/t26/s3405/
https://uscode.house.gov/us/usc/119-134/t26/s3405/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S023 Saved research record

OLRC, Currency and Updating; Classification Tables; 2026 classification table. https://uscode.house.gov/currency.html; https://uscode.house.gov/classification/tables.html; https://uscode.house.gov/classification/tbl119cd_2nd.html

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Publisher currency and classification metadata; not substantive tax authority.
Actual read bounds, precise pinpoints, and limits
Currency and table-explanation pages read; 2026 table header and entire Title 26 block read. Not the entire classification table or a full session-law audit. US Code +2
Direct source URLs
https://uscode.house.gov/currency.html
https://uscode.house.gov/classification/tables.html
https://uscode.house.gov/classification/tbl119cd_2nd.html
https://uscode.house.gov/currency.html?utm_source=chatgpt.com
https://uscode.house.gov/classification/tables.html?utm_source=chatgpt.com
https://uscode.house.gov/classification/tbl119cd_2nd.html?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}
R036-P1-S024 Saved research record

Congress; OLRC, 26 U.S.C. §807 notes, P.L. 115-97 §13517(c). https://uscode.house.gov/us/usc/119-124/t26/s807/

Recorded check status: original researcher attributed not freshly reopened

Version, legal status, and effectiveness
Retrieved text through P.L. 119-124, October 15, 2026. Enactment December 22, 2017; specified amendments apply to taxable years beginning after December 31, 2017.
Actual read bounds, precise pinpoints, and limits
Read complete §13517(c)(1)–(3) effective-date, transition, and transition-relief note. Not whole §807. The reserve transition was not imported into policyholder loan taxation. uscode.house.gov
Direct source URLs
https://uscode.house.gov/us/usc/119-124/t26/s807/
https://uscode.house.gov/us/usc/119-124/t26/s807/?utm_source=chatgpt.com

Recorded coordinator check boundaries

coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "scope": "Whole saved source record read/reconciled; no fresh body certification. Preserve original exact read/version/secondary/currentness/PDF/judicial/contract/application limitations.", "fresh_selected_evidence": [], "new_failure_evidence": [], "all_original_holds_retained": true}

What was examined—and what is still missing

The saved component-level coverage record keeps answered, partial, blank and unresolved branches distinct. A coverage label is not acceptance of a whole subject or jurisdiction.

coverage-1 Saved research record

1 — Complete material §72 provisions

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered, selected complete provisions
Finding and evidence crosswalk
S001 read bounds; C005, C053–C086; B05–B14, B20.
Missing evidence or exact next permissible inquiry
Actual application unresolved; no claim of whole-§72 reading.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-2 Saved research record

1 — Actual life-contract definition

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered
Finding and evidence crosswalk
C002–C034; S003, S006, S014, S024; B01–B02.
Missing evidence or exact next permissible inquiry
Qualification facts held; targeted further published qualification guidance only.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-3 Saved research record

1 — Actual MEC definition and seven-pay computation

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered statutory framework
Finding and evidence crosswalk
C035–C048; S002; B03, B17.
Missing evidence or exact next permissible inquiry
Actual actuarial test and contract facts held.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-4 Saved research record

1 — Investment and distinct value definitions

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered
Finding and evidence crosswalk
C003–C005, C013, C046, C056, C058, C094; S001–S004.
Missing evidence or exact next permissible inquiry
Actual measurement inputs absent; no interchange of definitions.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-5 Saved research record

1 — Nested benefit-reduction/material-change rules

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered
Finding and evidence crosswalk
C015–C020, C038–C045, C069; S002–S003, S011.
Missing evidence or exact next permissible inquiry
Actual reduction/change/rider predicates held.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-6 Saved research record

1 — Issue/exchange/grandfather triggers

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered with specific partial issue
Finding and evidence crosswalk
C007, C028–C034, C044, C049–C052, C060, C070; S001–S003, S006, S014.
Missing evidence or exact next permissible inquiry
§7702(i)’s post-2020 legacy cross-reference remains partial; next inquiry is published Treasury/IRS interpretation.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-7 Saved research record

1 — Aggregation

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered statutory rules
Finding and evidence crosswalk
C012, C042, C070, C092, C095; B11.
Missing evidence or exact next permissible inquiry
Additional regulatory anti-abuse application not presumed; exact statutory grouping facts held.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-8 Saved research record

1 — No uniform permanent-policy/loan/balance inference

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered boundary
Finding and evidence crosswalk
C002, C035, C054–C066, comparison table.
Missing evidence or exact next permissible inquiry
No actual classification supplied.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-9 Saved research record

2 — Non-MEC versus MEC

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered
Finding and evidence crosswalk
C035, C054–C059, C070, C078–C082; S001–S002.
Missing evidence or exact next permissible inquiry
Application unresolved without qualification/MEC evidence.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-10 Saved research record

2 — Annuity and excluded-contract comparison

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered to necessary boundary
Finding and evidence crosswalk
C026, C060, C071, C073–C077, C083–C085.
Missing evidence or exact next permissible inquiry
Full annuity/retirement analysis excluded; B02, B20 identify permitted next inquiry.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-11 Saved research record

2 — Unknown/nonqualifying category

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered conditional rule
Finding and evidence crosswalk
C023–C025; S003 §7702(g); B01.
Missing evidence or exact next permissible inquiry
Actual failure and annual/catch-up amounts unresolved.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-12 Saved research record

2 — Loan and collateral assignment/pledge

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered statutory trigger
Finding and evidence crosswalk
C054–C059, C071–C072; B06–B07.
Missing evidence or exact next permissible inquiry
Character, affected portion, timing, and exceptions unknown.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-13 Saved research record

2 — Cash distribution ordering and investment recovery

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered conditional rule
Finding and evidence crosswalk
C005, C016–C020, C053–C061, C067–C075.
Missing evidence or exact next permissible inquiry
Receipt/start-date/aggregation inputs absent.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-14 Saved research record

2 — Complete surrender/refund/maturity

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered
Finding and evidence crosswalk
C061–C064; S001, S013, S016–S018.
Missing evidence or exact next permissible inquiry
Actual amount received and prior investment unknown.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-15 Saved research record

2 — Lapse/termination/discharge and zero-cash events

Recorded check status: recorded; no individual primary acceptance inferred

Status
Partial public-law coverage; unresolved application
Finding and evidence crosswalk
C064–C066; B08–B10.
Missing evidence or exact next permissible inquiry
Need event-specific published authority and absent event mechanics; no case or record query.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-16 Saved research record

2 — Separate cash, income, liability, policy debt, and later event

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered analytical distinction
Finding and evidence crosswalk
C005, C057–C058, C064–C066, C103, C107–C113.
Missing evidence or exact next permissible inquiry
No actual reconciliation possible.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-17 Saved research record

3 — MEC additional-tax base/rate

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered
Finding and evidence crosswalk
C078; S001 §72(v)(1).
Missing evidence or exact next permissible inquiry
Includible amount unknown; E0.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-18 Saved research record

3 — Age/disability/periodic-payment exceptions

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered statutory predicates
Finding and evidence crosswalk
C079–C082; S001 §§72(v)(2), (m)(7); B12.
Missing evidence or exact next permissible inquiry
Actual taxpayer/event evidence held.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-19 Saved research record

3 — Periodic-payment modification/recapture

Recorded check status: recorded; no individual primary acceptance inferred

Status
Partial
Finding and evidence crosswalk
C084, C086; S001 versus S019.
Missing evidence or exact next permissible inquiry
Published §72(v)-specific authority resolving instruction/statute tension not established.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-20 Saved research record

3 — Necessary interest-deduction provisions

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered statutory gates; application excluded/held
Finding and evidence crosswalk
C087–C099; S004–S006; B13.
Missing evidence or exact next permissible inquiry
Full deduction tracing, business ownership, rates, elections, and calculations held.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-21 Saved research record

3 — No borrowing prohibition from deduction restriction

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered boundary
Finding and evidence crosswalk
C091, C099–C100.
Missing evidence or exact next permissible inquiry
Contractual rights and insurance consequences excluded.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-22 Saved research record

3 — No §72(p), consumer-loan, or death-benefit importation

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered boundary
Finding and evidence crosswalk
C065–C066, C077, C082, C105, C112.
Missing evidence or exact next permissible inquiry
Other components and full death/COD regimes excluded.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-23 Saved research record

4 — Necessary final regulations

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered selected reading; partial original-history verification
Finding and evidence crosswalk
S012–S015; C029, C061, C073, C102.
Missing evidence or exact next permissible inquiry
Original §1.1035-1 issuance/effectiveness and complete old-T.D. histories not verified.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-24 Saved research record

4 — Published IRS interpretation and modification status

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered
Finding and evidence crosswalk
S016–S018; C062–C064.
Missing evidence or exact next permissible inquiry
No universal loan-lapse conclusion extrapolated from a loan-free ruling situation.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-25 Saved research record

4 — Public instructions, version, fields, reporting function

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered selected material body
Finding and evidence crosswalk
S019; C086, C109–C112.
Missing evidence or exact next permissible inquiry
Exact issuance day not established; no whole-document/form-pixel claim.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-26 Saved research record

4 — Reporting/withholding authority

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered boundary
Finding and evidence crosswalk
S020–S022; C106–C108, C113.
Missing evidence or exact next permissible inquiry
Actual obligation and full reporting rules held.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-27 Saved research record

4 — Primary-source status/access/read bounds

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered with disclosed gaps
Finding and evidence crosswalk
Source register, C001, source-read/failure log.
Missing evidence or exact next permissible inquiry
Compilation dates are not a complete later-law or judicial audit.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-28 Saved research record

5 — Provision-specific comparison

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered
Finding and evidence crosswalk
Section 3; C002–C113 as linked there.
Missing evidence or exact next permissible inquiry
All actual applications remain unresolved.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-29 Saved research record

5 — At least twelve substantive branches

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered: B01–B20
Finding and evidence crosswalk
Each branch contains rule, C/S links, missing evidence, adverse inference, next inquiry.
Missing evidence or exact next permissible inquiry
None populated with an identifying entry.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-30 Saved research record

5 — Wholly blank evidence/audit worksheet

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered
Finding and evidence crosswalk
Section 5.
Missing evidence or exact next permissible inquiry
All entry cells deliberately blank.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-31 Saved research record

5 — No borrowing/surrender/lapse/replacement recommendation

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered scope requirement
Finding and evidence crosswalk
C100; B16, B18.
Missing evidence or exact next permissible inquiry
Suitability and contractual consequences excluded.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-32 Saved research record

6 — Optional mathematical illustration

Recorded check status: recorded; no individual primary acceptance inferred

Status
Omitted with reason
Finding and evidence crosswalk
E0; Section 6.
Missing evidence or exact next permissible inquiry
Missing trigger, measurement, ordering, aggregation, and convention inputs.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-33 Saved research record

6 — No actual deadline/value/deduction/tax bill

Recorded check status: recorded; no individual primary acceptance inferred

Status
Answered scope requirement
Finding and evidence crosswalk
E0; no application numbers supplied.
Missing evidence or exact next permissible inquiry
Statutory dates and thresholds are stated only as law.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-34 Saved research record

Parent holds and other A036 components

Recorded check status: recorded; no individual primary acceptance inferred

Status
Excluded with reason
Finding and evidence crosswalk
C077, C100, C105, C113; B13, B15–B16.
Missing evidence or exact next permissible inquiry
Retirement, equity, family help, savings/asset sales, other taxes, nonfederal law, insurer practices, and full remedies/reporting remain reserved.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}
coverage-35 Saved research record

Independent review / acceptance

Recorded check status: recorded; no individual primary acceptance inferred

Status
Not performed or claimed
Finding and evidence crosswalk
Researcher self-check below.
Missing evidence or exact next permissible inquiry
No component, parent, operational, or publication acceptance.

Recorded coordinator check boundaries

coordinator acceptance
scoped_coordinator_review_with_retained_holds_not_parent_acceptance
coordinator review
{"at": "2026-10-29T09:14:28.212258+00:00", "identity": "delegated_coordinator_not_independent", "source_checks": "[internal evidence reference]", "original_gap_text_unchanged": true}

Corrections, review and scope

Read the evidence with its boundaries. These are saved research components, including revisions. A scoped coordinator review checks selected evidence; it does not certify every claim, a complete jurisdiction, current law or individual applicability. Dates and access limits remain attached to the records.

How to read the research →

No currently queued material correction is mapped to this component. This does not remove its currentness, access, jurisdiction or application limits.

Recorded review disposition

scoped coordinator review completed with material primary access currentness application holds

Other components in this research series

Download this complete public research record (JSON)
Record integrity

Original saved Markdown SHA-256: c8c6ba91e08996a97813c594c5c7ec4aa4503ecfee430d0f8d7fabadfcdd977c. Public formatting, private-reference removal and correction annotations are separate from that immutable original.

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