New Jersey Administrative Code
Title 18 - TREASURY - TAXATION
Chapter 26 - TRANSFER INHERITANCE AND ESTATE TAX
Subchapter 7 - DEDUCTION
Section 18:26-7.17 - Loans secured by life insurance policies
Current through Register Vol. 56, No. 6, March 18, 2024
(a) A deduction is not allowed for a loan by an insurance company made to a decedent as the insured against a life insurance policy, because it is not considered a debt of the decedent but rather an advancement of the cash value of the policy.
(b) A deduction is not allowed for a loan made by a third party to a decedent secured by the assignment of a life insurance policy on the life of the decedent and satisfied from the proceeds of the policy. However, the right of a beneficiary to reimbursement from the estate for the amount of the loan is a proper claim by way of subrogation against the decedent's estate and is an allowable deduction unless a contrary intention is indicated.