We Prepare Tax Returns!

We prepare most type of tax returns:


S Corporation.

C Corporation.




Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

Client Video Testimonials

Click here to watch some of our clients in their video testimonials!

Client Testimonials

My husband and I had to deal with canceled debt from a Deed in Lieu of Foreclosure on a second home with our 2012 taxes. We never had to deal with this type of tax experience and needless to say, we were fearful. Owing taxes on possible additional income was stressful. We searched for CPA’s as well as info about DILs and how Insolvency worked. When we came across Gary’s website, we were impressed. We found his website 8 months prior to tax season. We kept it as a “Favorite” as we knew we would need to contact him for assistance. When it was time to get a CPA, we called Gary. We felt relieved that we actually had someone that not only understood our concerns but was an expert in this area. He walked us through the process and all the time telling us not to worry. When our taxes were completed, you cannot imagine the relief we had when we actually were able to get a refund.

Gary is a dedicated professional and attentive to his clients. We love the virtual office as it is convenient during tax time and he’s fees were fair and affordable when you consider the depth of work accomplished on our taxes!

We’ve already started recommending Gary to others. We are so blessed and grateful for all that Gary did to assist with our taxes.


Patty and Tim, Fredericksburg, VA

Free Consult

Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

Pay Your CPA

Enter $ Below
Other Amount:
Your Email Address:

A Wilmington Tax Accountant Discusses Life Settlements

A Wilmington NC CPA and tax accountant discuss life settlements and IRS Rev Ruling 2009-13

Life Settlements: a Wilmington NC tax accountant says to consider all the factors carefully

A life settlement is cash paid to an owner of a life insurance policy while the insured is still alive. Obviously for less than the face value of the policy, but more than the cash value.  Often in a scenario where the policy would otherwise be surrendered or allowed to lapse. 

“While a life settlement does provide cash now, new IRS rulings have increased taxes on the proceeds.  Due diligence dictates weighing all the factors, and alternatives, carefully.”
Gary Bode, CPA 
Wilmington NC Tax Accountant

The Life Settlement Industry

Like any financial transaction, the life settlement company is out to make a profit.  A lot of profit. The industry developed a predatory reputation secondary to being largely unregulated, and the elderly nature of the clientele. Underlying industry capital evaporated in the recession. Some say the industry is now only about half as what it was, in dollars, prior to 2008: 16 Billion to 8 Billion.  But with over a Trillion, yes a Trillion, dollars of life insurance being surrendered or lapsing annually, combined with high potential profit and the graying of America, the life settlement industry will probably regain ground.

Sound Choice?

Perhaps. But taxes have to be factored in to reach net cash value of any lifetime settlement. And the alternative scenario of the effect of the full policy value on the estate of the insured should be considered, if there is enough current cash in the family to wait.

Before Rev. Ruling 2009-13

When a policy is surrendered, the owner’s taxable profit is ordinary income equaling the cash value received less the premiums paid.  Very straight forward.  Life Settlements essentially split the deal into two taxable components: ordinary income, the same as the surrender scenario, plus capital gains on the life settlement amount less the cash surrender amount.

After Rev. Ruling 2009-13

An adjustment for the hypothetical value of the insurance coverage while it was in force is now required.



Cash Life Settlement:  Surrender Value ($100,000) – Premiums Paid ($92,000) = Taxable Income ($8,000).

Old Life Settlement, pre Rev Ruling 2009-13

There are two life settlement components. The first is ordinary income, thesame as the surrender scenario above.  Cash Surrender Value ($100,000) – Premiums Paid ($92,000) = Taxable Income ($8,000). Plus Capital Gains on the Life Settlement payment ($110,000) less the Cash Surrender Value ($100,000).  Total: $18,000 in taxable interest.

New Life Settlement per Rev Ruling 2009-13

A hypothetical value of the worth of insurance coverage, which I’m estimating at $5,000 for this example, raises the ordinary income to $13,000.  The Capital Gains component stays the same at $10,000.  For taxable income of $23,000. The government often tries to dictate social policy through taxation.  As a Wilmington NC CPA and tax accountant, I wonder if the IRS deliberately dissuading life settlements?

For a free initial consult on this or any accounting or taxation issue, please call us at (910) 399-2705.

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>