vertical privity. 1  The legal relationship between links in a productâs distribution chain. 2  The privity between a person who signs a contract containing a restrictive clause and the person acquiring the property that is so restricted.
The taxation of life insurance proceeds or endowment policy proceeds payable during the insured`s lifetime is governed by Code 72, the same section that governs the taxation of the payments received under annuity contracts.here the proceeds of an endowment or surrendered policy are paid during life in a lump sum, any excess of such proceeds over the cost of the policy is taxable income [I.R.C. 72(e); Reg. 1.72-11(d)]. The gain is considered ordinary income and not capital gain.
Note: Net short-term capital gains are subject to taxation as ordinary income at graduated tax rates. 1  The taxable part of a gain from selling section 1202 qualified small business stock is taxed at a maximum 28% rate. 2  Net capital gains from selling collectibles (like coins or art) are taxed at a maximum 28% rate.