An actuary is retained to determine the fair market value of a life insurance policy by an individual to a wholly-owned corporation, and the transferor and transferee split the actuary’s fee. Respecting the deductibility to the transferor, CRA stated:
By virtue of 148(1), a policyholder must include any excess of the proceeds of disposition of the policyholder’s interest in the policy, which, in this case, is the value of the policyholder’s interest in the policy over the adjusted cost basis of that interest immediately before the disposition. Expenses incurred by the policyholder in making the disposition are not included in that calculation.