PUBLISHED ON: March 12, 2009
In the August 2008 issue of Risk Management, we wrote that the U.S. tax treatment of rent-a-captives (aka “cell captives”) had been demystified by Revenue Ruling 2008-8 (“Rent-a-Captive Taxes Demystified”). Since then, some captive insurance tax advisers have said that the clarity offered by this ruling is not yet effective.
Differing views about the tax treatment of cell captives have created a present and pressing dilemma for captive managers and cell captive participants. What to believe?