I've got a follow-up to the question I asked last week regarding the designation of the pay-out from a life insurance policy purchased back in 1986. After additional research, we've realized that the policies (there are 45 that were purchased) are owned by my institution. As a result, we're now wondering if the pay-out is actually income, and should not be booked as a gift. Would this not be akin to royalties from the gift of an oil well, or dividends from the gift of stock?
If we are able to book it as a gift, should we deduct the original gift of the policy premium that was book is 1986?
Once we get this worked out, we'll be documenting everything for future staff, since it's likely many of the policies will not be paid on for many years.