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Instructions for Form 8921

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(Init. & date)

9:36 - 22-AUG-2007

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Instructions for Form 8921

Department of the Treasury

Internal Revenue Service

(August 2007)

Applicable Insurance Contracts Information Return

Section references are to the Internal Revenue Code unless

otherwise noted.

If filing using a private delivery service, the private delivery

service can tell you how to get written proof of the mailing date.

General Instructions

Penalty

Purpose of Form

Generally, an applicable exempt organization must file a Form

8921 for each structured transaction under which it makes

reportable acquisitions of applicable insurance contracts. See

Definitions below for terms used in these instructions and Form

8921. For more information on the reporting requirements, see

section 6050V. See When and Where to File below regarding

filing deadlines.

Who Must File

Applicable exempt organizations must file Form 8921 if they

acquire a direct or indirect interest in an applicable insurance

contract after August 17, 2006, and on or before August 17,

2008, regardless of the date of the structured transaction itself.

A separate Form 8921 must be filed with respect to each

separate structured transaction to which the organization is a

party. See Definitions below.

How to Complete Form

In order to be considered complete, Form 8921 must be

completed in its entirety with all required attachments. If the

information required exceeds the space provided, attach

additional sheets. The additional sheets must be in the same

order as the lines to which they correspond. Include your

organization’s name, employer identification number (EIN), and

the structured transaction identifier (STI) at the top of each

additional sheet.

Round off cents to whole dollars. To round, drop amounts

under 50 cents and increase amounts from 50 to 99 cents to

the next dollar. For example, $1.39 becomes $1 and $2.50

becomes $3. If two or more amounts must be added to figure

the amount to enter on a line, include cents when adding the

amounts and round off only the total.

There is a penalty under section 6721 for the failure to file a

required Form 8921 by the required filing date. See When and

Where to File earlier. Other penalties are imposed for failure to

include all information and required attachments, or for

inclusion of incorrect information. See sections 6721 and

6724(d)(1)(B)(xiv).

If one or more failures are due to intentional disregard of the

filing requirement (or the correct information reporting

requirement), then the penalty per failure is the greater of (a)

$100 or (b) 10% of the value of the benefit of any applicable

insurance contract for which information is required to be

included on the return. In this case, the penalty imposed for

such intentional disregard is not taken into account in applying

any calendar year limitation. See section 6721(e).

No penalty shall be imposed for any failure if it is shown that

such failure is due to reasonable cause and not to willful

neglect. See section 6724(a).

Definitions

Applicable Exempt Organization

An applicable exempt organization is generally a religious,

charitable, scientific, literary, educational, amateur sports or

similar organization, a governmental organization, a fraternal

society operating on a lodge system, a veterans’ organization,

an Indian tribal government, a cemetery company, or an

employee stock ownership plan. See section 6050V(d)(3) for

more details. The term “organization,” when used in these

instructions, refers to an applicable exempt organization.

Applicable Insurance Contract

IF reportable

AND on or before...

acquisitions were

made, or new or

corrected information

was obtained, after...

THEN file an initial or

subsequent Form

8921 by...

August 17, 2006,

August 17, 2007,

November 1, 2007

An applicable insurance contract is any life insurance, annuity,

or endowment contract in which both an applicable exempt

organization and a person other than an applicable exempt

organization have directly or indirectly held an interest (whether

or not at the same time). However, a contract is not an

applicable insurance contract if:

• Each person directly or indirectly holding an interest in the

contract (other than an applicable exempt organization) has an

insurable interest in the insured under the contract that is

independent of the applicable exempt organization’s interest in

the contract,

• The sole interest in the contract of each involved person is as

a named beneficiary, or

• Under certain circumstances, the sole interest in the contract

of each person other than an applicable exempt organization is

as a beneficiary of one or more trusts holding an interest in the

contract, or as a trustee who holds an interest in the contract

solely in a fiduciary capacity. See section 6050V(d)(2).

August 17, 2007,

August 17, 2008,

October 31, 2008

Broker/Advisor

When and Where to File

If an applicable exempt organization makes a reportable

acquisition after August 17, 2006, and on or before August 17,

2008, it must file a Form 8921 according to the following

schedule.

If any information required by Form 8921 is unavailable at the

time of filing, or if any information already provided changes or

is found to be in error, then an updated or corrected Form 8921

must be filed according to the above schedule.

A broker/advisor is any person that, for compensation, supplies

professional services to the other parties to the structured

transaction. This transaction role includes persons providing

legal, financial, accounting, or other advice, as well as persons

providing brokerage or investment banking services.

Where to send. Send Form 8921 to the following address.

Contract Beneficiary

Department of the Treasury

Internal Revenue Service

Ogden, UT 84201-0027

A contract beneficiary is any person eligible to receive death or

endowment benefits, in the case of life or endowment

insurance, or annuity payments in the case of annuities. There

Cat. No. 49348T

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Instructions for Form 8921

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may be more than one contract beneficiary with respect to a

single contract.

Specific Instructions

Contract Form

Part I. Identifying Information

Each contract form must be identified by each contract type

(such as a life insurance policy, endowment policy, or annuity

contract). Each contract form must also be separately identified

if the contract forms are issued by different insurers or if they

have differing terms (such as different premium structures,

investment options, or withdrawal options) from other contracts

of the same type. For example, if the answers with respect to

any two contracts differ for line 10a, 10b, 10c, 11, 12d, 13a,

15a, or 17 of Form 8921, then the two contracts constitute

separate contract forms, and each contract form must be

identified and reported in a separate column for purposes of

answering questions under Part III of Form 8921.

Line 1

Enter the date (MM/DD/YYYY) that your organization entered

into the structured transaction. This is the earliest date on which

your organization agreed to terms with any other party to the

structured transaction or on which your organization supplied

relevant information on potential insureds.

Line 2

Enter a structured transaction identifier (STI). The STI is to be

used to identify the section 6050V structured transaction for

which this Form 8921 is being filed. It should be entered on all

additional sheets attached to Form 8921, and on all other

required attachments to Form 8921.

The STI consists of the letters “STI” followed by a four-digit

number that is unique for each structured transaction to which

your organization is a party. For example, if this is the sole

structured transaction entered into by your organization, enter

0001 after STI on line 2. The “STI0001” would be entered on all

additional sheets and on all other required attachments to Form

8921. If your organization is a party to a second structured

transaction, the STI would read “STI0002” for that transaction.

Contract Owner

A contract owner is any person possessing any benefits and

burdens of ownership as they relate to applicable insurance

contracts. Generally, this is any person with the power to

change a beneficiary designation, to borrow a part (or all) of a

policy’s cash value, or to otherwise withdraw funds. There may

be more than one contract owner with respect to a single

contract.

Creditor

Line 3

A creditor is a person that supplies funds in return for a fixed

return or a variable rate of return that is determined by an

interest rate index and a spread.

Check the appropriate box. A corrected return must be filed to

correct any errors on any previously filed Form 8921 or to add

appropriate information on an incomplete Form 8921. An

updated form must be filed if any additional applicable

insurance contracts have been acquired, or if there is any

material change in the terms or relationship in a structured

transaction. For any subsequently filed Form 8921, complete

Part I fully, but complete other lines only if they are being

corrected or updated. Enter the correct information for each

changed line, not the difference in amount from the previous

form.

Insurable Interest

Insurable interest is a state law concept which requires that a

life insurance policyholder have a direct interest in the

continuance of the life of the insured. For example, a

tax-exempt organization may have an insurable interest in the

lives of its donors. An organization’s role in a structured

transaction is to provide an insurable interest if one or more

applicable insurance contracts are purchased based on the

organization’s relationship to the insured individual.

Lines 4a through 4f

Investor

Enter the name, employer identification number (EIN), mailing

address, website address, and the state (or, if a foreign entity,

the country) in which your organization is organized. The EIN

(along with the STI) must be entered also on all additional

sheets attached to Form 8921, and on all other required

attachments to Form 8921.

An investor is a person, other than a creditor, that supplies

funds in return for an equity interest. An equity interest exists

wherever compensation is variable and uncertain in amount,

timing, or both (other than with respect to a variable interest

contract) at the time the outlay of funds is made.

Line 5

Party to the Structured Transaction

Check all boxes that describe your organization’s role in the

structured transaction. See Definitions above.

A party to the structured transaction is any person (other than

the applicable exempt organization filing the Form 8921) that is

known to hold (directly or indirectly) an interest in one or more

applicable insurance contracts, or who otherwise receives (or

will receive) amounts from the structured transaction. An

insured is not a party to the transaction, unless that person has

an interest in the applicable insurance contract or the structured

transaction other than as an insured.

Lines 7a and 7b

Enter on line 7a the amounts received by your organization

under the structured transaction at the time of the filing of this

Form 8921.

Enter on line 7b the amounts expected to be received by

your organization under the structured transaction in the future.

Amounts should be expected values, based on contract terms

and/or amounts shown in promotional or other materials.

Reportable Acquisition

A reportable acquisition is one in which an acquisition is made

of a direct or indirect interest in an applicable insurance contract

when the acquisition is a part of a structured transaction

involving a pool of such contracts.

Part II. Parties to the Structured

Transaction

Structured Transaction

Lines 8a through 8l

A structured transaction is any transaction in which an

applicable exempt organization acquires a direct or indirect

interest in a pool of applicable insurance contracts.

Enter the requested information for each party to the structured

transaction. See Definitions earlier for the definition of a party to

the structured transaction and for definitions of the party’s role

in the structured transaction. Use a separate column for each

party. Attach additional sheets as necessary.

Lines 8a through 8c. Enter the name, social security or

employer identification number, and mailing address of each

party to the structured transaction.

Structured Transaction Identifier (STI)

A structured transaction identifier (STI) is a 4-digit number used

to identify the structured transaction for which a Form 8921 is

being filed. See instructions for line 2, below.

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Instructions for Form 8921

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Line 8d. Check all boxes that describe the party’s role or roles

in the structured transaction. If “Other” is checked, provide a

description in the space provided. See Definitions earlier for

definitions of roles.

Line 8e. Check the appropriate box that describes the party’s

legal form. If “Other” is checked, provide a description in the

space provided.

Line 8f. Check the box if the party to the structured transaction

is a foreign entity not subject to U.S. federal income tax.

Line 8g. Check the box if the party to the structured

transaction is an applicable exempt organization.

Line 8h. If the party to the structured transaction is a trust,

partnership, association, or corporation, enter the number of

trust beneficiaries, partners or association members, or

corporate stockholders as of the filing date.

Line 8i. Report amounts paid or expected to be paid by the

party under the structured transaction. Amounts to be paid in

the future are expected values based on contract terms and/or

amounts shown in promotional or other materials.

Line 8j. Report amounts received by the party to the

structured transaction as of the filing date of this Form 8921.

Line 8k. Report amounts to be received by the party to the

structured transaction in the future. Future amounts are

expected values, based on contract terms and/or amounts

shown in promotional or other materials.

Line 8l. Check the appropriate box for each reportable person

for whom the amounts reported on line 8j or line 8k and/or their

timing depend on the payment of death or endowment benefits,

or annuity benefits.

Enter on line 13b and 13c the aggregate premiums paid or to

be paid for contracts issued under each separate contract form.

Allocate premiums according to whether they have been or will

be paid in the first policy year or later. Future premiums are to

be included on line 13c, and should be expected values based

on contract terms and/or amounts shown in promotional or

other materials.

Lines 14a and 14b. Enter on line 14a the aggregate value of

death or endowment benefits associated with all contracts

issued under each separate contract form as of the dates the

contracts were issued.

Enter on line 14b, for each contract form, the smallest and

the largest contract death or endowment benefit as specified on

the date each contract was issued.

Lines 15a through 15c. Complete lines 15a through 15c if the

contract type is an immediate annuity. Otherwise, go to line

16a.

On line 15a, check the “Fixed” box if annuity payments are

fixed in amount or are indexed only to a consumer price index.

Check the “Variable” box if they are dependent upon a fund

value or other index (other than a consumer price index).

Whether fixed or variable, check the “Inflation-indexed” box if

the annuity is indexed to a consumer or similar price index.

Enter on line 15b the aggregate value of monthly annuity

payments (or monthly equivalent payments, if payments are not

made on a monthly basis) for all contracts issued under each

immediate annuity contract form. This value should reflect

annuity payments when the contracts were first issued.

Enter on line 15c the values of the smallest and largest

monthly annuity payments (or monthly equivalent payments, if

payments are not made on a monthly basis) for immediate

annuity contracts issued under each immediate contract form.

These values should reflect the annuity payments when a

contract was first issued.

Lines 16a and 16b. Enter on line 16a the aggregate policy

loans made (or expected to be made) under each contract form.

Enter on line 16b the aggregate value of any other amounts

distributed (or expected to be distributed) from each contract

form (other than as death or annuity benefits or as loans). For

example, include any anticipated partial withdrawals of cash

values or any expected amounts to be received upon the future

surrender of the contracts.

Line 17. Identify the available investment options under the

contract. Check all boxes that apply, even if one or more

options are not chosen.

Part III. Applicable Insurance Contract

Forms

Lines 9 through 21

Enter the requested information for each separate contract form

for the structured transaction being reported on this Form 8921.

See Definitions earlier for the definition of a contract form. A

separate column must be used for each contract form. Attach

additional sheets as necessary.

Line 9. Enter a contract form identifier (number or name) that

can be used to identify the contract being reported in each

column. Mark any contract form attachments submitted

according to the line 21 instructions with the appropriate

contract form identifier.

Lines 10a through 10c. Enter the name and employer

identification number of the insurer issuing the contract form,

and specify the state (or, if a foreign entity, the country) in which

the insurer is organized.

Line 11. Check the box that appropriately identifies the type of

applicable insurance contract. An immediate annuity is a

contract under which the first benefit payment is due within one

year from the date of purchase. Under a deferred annuity,

payments begin, if at all, at a later date.

Lines 12a through 12d. On lines 12a and 12b, enter the

earliest and latest dates (MM/DD/YYYY) on which a contract

was issued under each contract form. Enter the total number of

policies issued under each contract form on line 12c. For group

insurance, enter the number of policy certificates issued under

the group contract on line 12c, and check the box under line

12d. The entry on line 12c should be the number of contracts

(or, in the case of a group contract, the number of certificates),

and may not correspond to the number of insureds.

Lines 13a through 13c. On line 13a, check the “Fixed in

contract” box if premium obligations are fixed in amount and

period by the insurance contract. If premiums are to be paid

over the life of the insured(s), check the box “Life of the

insured.” If the premium term is fixed, check the “years” box and

enter the premium term in years. Check the “Discretionary” box

if premium amounts and timing are determined at the discretion

of a contract owner.

IF...

THEN check box

for...

No specified investment option is available (for

example, when only a guaranteed cash value

schedule is specified), regardless of whether or not

policyholder dividends may be paid

No option.

Fixed or variable rates of interest are specified, but

there is no possibility that the market value of the

contract cash value may decline due to changes in

the market pricing of shares

Guaranteed

interest.

Investments in bond, equity, or blended funds are

available, and the cash value of the contract

depends on the market value of the underlying

investments

Bond or equity

funds.

The contract provides other types of investment

Other. Provide a

options, including options that offer additional

description in the

guarantees as to the contract cash value (for

space provided.

example, contracts that guarantee a fixed or variable

floor on cash values in situations where the market

value of the underlying investments declines)

Lines 18a through 18c. Enter the number of insured males

and insured females for each contract form on line 18a. Specify

the average age at issue of all insureds for each contract form

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Instructions for Form 8921

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on line 18b, and specify the youngest and oldest insured for

each contract form on line 18c.

Lines 19a and 19b. Enter on line 19a the number of insureds

that are donors to your organization. On line 19b, enter the

aggregate value of the donations received by your organization

from individuals insured under each contract form. These

values are those applicable to the calendar year most recently

completed prior to the structured transaction date (reported on

line 1).

Line 20. Attach a detailed description of the structured

transaction. Your description must:

• State all material facts that are relevant to understanding the

structure, economic benefits, and tax consequences of the

structured transaction;

• Identify the owners and beneficiaries of the applicable

insurance contracts;

• Describe the nature of the cash flows among parties

described on lines 8a through 8l, and between such parties and

your organization, including the methods used to allocate

earnings and insurance benefits;

• Identify recipients or payers of any residual surplus or deficit

amounts; and

• If interest rates are fixed by contract, provide the specific

rates and terms, and if variable, identify the index(es) and

spread(s).

Line 21. Attach copies of related documents, including

representative copies of applicable insurance contracts issued

as part of the structured transaction for which this Form 8921 is

being filed. Also include any contracts governing the obligations

of persons described on line 8a and any agreements covering

the relationship of your organization to such persons. Include

promotional materials (including financial projections) provided

to your organization, to your donors, or to other persons who

have directly or indirectly held an interest in the applicable

insurance contracts.

Paperwork Reduction Act Notice. You are not required to

provide the information requested on a form that is subject to

the Paperwork Reduction Act unless the form displays a valid

OMB control number. Books or records relating to a form or its

instructions must be retained as long as their contents may

become material in the administration of any Internal Revenue

law. Generally, tax returns and return information are

confidential, as required by section 6103.

The time needed to complete and file these forms will vary

depending on individual circumstances, such as the complexity

of the section 6050V structured transaction and the number of

individuals insured under the applicable insurance contracts.

The estimated burden of applicable exempt organizations filing

these forms is approved under the OMB control number

1545-2083 and is shown below.

Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . .

Learning about the law or the form . . . . . . . . . . .

Preparing, copying, assembling, and sending the

form to the IRS . . . . . . . . . . . . . . . . . . . . . . . . . .

33 hrs., 43 min.

47 min.

1 hr., 22 min.

If you have comments concerning the accuracy of these time

estimates or suggestions for making this form simpler, we

would be happy to hear from you. You can write to the

Department of the Treasury, Internal Revenue Service, Tax

Products Coordinating Committee, SE:W:CAR:MP:T:T:SP,

1111 Constitution Ave. NW, IR-6526, Washington, DC 20224.

Do not send the form to this address. Instead, see When and

Where to File on page 1.

Part IV. Signature

An authorized individual must sign and date the Form 8921 for

your organization. Enter that individual’s name, title, and

telephone number in the spaces provided.

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