where to enter source for double entry

[Mike or Penny Novack]

>Assuming you paid the full premium for the life insurance policy it
>would work something like this:
>
>Checking Account <full amount>  => $500 -> debt
>				=> remainder -> life insurance
>
>That is, the debt payment comes from the same source as the payment for
>the life insurance.  You can also think of it like this:
>
>Checking Account <full amount>  => life insurance => commision => $500 => debt
>						  => insurance company
>  
>
Eliminating the relative as a party to the transaction? It wasn't the 
insurance carrier that forgave anything.

I suggest that you keep those separate. The commission which the 
insurance carrier pays the agent is part of the price of the policy to 
the customer. You should keep the proper basis cost of all assets as may 
be needed later to figure capital gains (in this jurisdiction insurance 
proceeds are paid tax free and cost irrelevant; but if a policy is 
"cashed out" then the profit is a capital gain and you do need all of 
the basis).

Your relative chose to consider the commission paid to him by the 
insurance company as if it came from you. But it's part of his income 
for the year that he "gifted" to you. The fact that the source of the 
money was from the insurance company and that he wouldn't have gotten 
that particular payment from them except you bought the policy isn't 
entirely relevant. Money is "fungible".

Michael D Novack, FLMI  (life insurance was my "line of country")