Paying Bonus to company owners from a life ins policy.
Company received life insurance money. Can we pay give that to the 2 owners in a bonus form if we provide a 1099 so they claim it on their taxes. Because it was a life ins payment. The business receives it tax free but if we pay the owners equally in bonus, how would they claim it on their taxes. SHould it be done through pay roll or can we just pay 2 checks to them and provide a 1099? Please advise
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