Where to subtract dividends to policyholders from?
in the 3 types of income it is mentioned that "dividends to policyholders" is subtracted from other income. However, in table breaking out item & formula the (dividends to policyholders) is subtracted from TOTAL net income and not included as a negative item in the Other Income portion.
If a problem asks what the Other Income portion is should PH Dividends be subtracted off of that? I'm not even sure if it matters, just trying to be consistent when going through problems.
Comments
Judging by the the interactive PH Surplus calculation for #34 of the Full BattleQuiz (modeled after Fall 2017 #10), Dividend to PH is not included in other income. We were given an actual amount for Other Income here but still had to strip out Dividend to PH for the Net Income.
The way the wiki is set up would have me thinking Other Income already has the Dividend to PH pulled out.
Yes, my mistake. The line item "dividends to policyholders" is listed in the "Other Income" section which is why I said it should be subtracted from Other Income:
The text however does mention that there are 3 sources of income before federal and foreign income taxes and dividends to policyholders. The final result is the same whether you think of it as being subtracted from Total Income or just Other Income, but in that exam problem, it was important to realize that dividends to policyholders was not already included in the Other Income.
I have edited the wiki to say dividends from policyholders is subtracted from total income rather than other income:
Thx!