How do you calculate imputed income in a group term life plan that discriminates in favor of key employees? I do not understand the "tabular" premium described in 1.79-4T, A-6. I'd be interested to see an example of how the imputed income is calculated.

I'll leave the specifics of the tabular calculation for our friendly actuaries. My experience has been, at least for large employers, that the Table I rates are almost always higher (except at perhaps age 75 +) than the tabular rates. Thus, you end up using the Table I rates. This means that the only real penalty to flunking section 79 is that the key employee loses the $50,000 exclusion. Big deal! Depending on your goals, discriminatory group-term life can sometimes make more economic sense than split-dollar.

Your insurance carrier should be able to provide you with the tabular rates.