2021 Q2 Tax Planning for Corporate Investments

Now is the time to tax-plan for your company’s equity investments.

Why now?

President Biden has proposed an increase in C corporation tax rates, which would raise the federal rate from 21% to 28%. Corporations can choose to take action and avoid exposing a portion of their current or future investments to this and future tax-rate changes.

How can we tax-plan for corporate investments?

Corporations can choose to place their investments in a tax-free environment. A tax-free investment environment can lead to greater annual and compounding investment returns. Within this strategy investments grow tax-free, and reallocation is not a taxable event. This means that you and your investment committee can flexibly manage your allocation strategy without considering the associated tax consequences.

To avoid exposing current investments to the proposed rate increase, corporations can choose to realize gain at today’s lower rate, then convert investment proceeds to a similar, but tax-free investment. Similarly, corporations can choose to allocate new monies to this strategy. Deploying new money into a tax-free investing environment allows your company to avoid compounding your tax issues.

Who else is doing this?

Your carrier peers cumulatively hold over 24 billion dollars of their investments within this strategy. Carrier purchasers are life, P&C, and health insurers. Those deploying this strategy vary in size and investment philosophy. Their investments are made based on their individual investment philosophy and policy.

What tool are my peers using to do this?

The tool your peers are using is called ICOLI. ICOLI literally means insurance company owned life insurance. ICOLI contains hundreds of investment choices from well-known investment managers. ICOLI is institutional life insurance designed specifically for corporate ownership.

Would you like to explore how ICOLI can affect your company’s portfolio returns? Please reach out or schedule a call via this link.


Who is MBS?

MBS is a highly specialized corporate consulting firm with more than $13 billion dollars of our clients’ corporate investments. We manage over 225 corporate ICOLI and nonqualified plans.  Importantly, we do not replace your current investment advisors.

Jacob Bosacki, JD
Senior Consultant
(920) 819-4365


Variable Universal Life insurance combines the protection and tax advantages of life insurance with the investment potential of a comprehensive selection of variable investment options. The insurance component provides death benefit coverage and the variable component gives you the flexibility to potentially increase the policy’s cash value.

The materials are designed to convey accurate and authoritative information concerning the subject matter covered. However, they are provided with the understanding that Mullin Barens Sanford Financial does not engage in the practice of law, or give tax, legal or accounting advice. For advice in these areas, please consult your appropriate advisors.

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