Susan is the beneficiary of a $50,000 insurance policy on the life of her mother, Kayla....
Susan is the beneficiary of a $50,000 insurance policy on the life of her mother, Kayla. To date, Kayla has paid premiums of $16,000 on the policy. Kayla elects to cancel the policy and receive $21,000, the cash surrender value of the policy. How much gross income must Kayla report as taxable income?
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Susan is the beneficiary of a $50,000 insurance policy on the
life of her mother, Kayla....
1. Susan is the beneficiary of a $50,000 insurance policy on the life of her mother,...
1. Susan is the beneficiary of a $50,000 insurance policy on the life of her mother, Kayla. To date, Kayla has paid premiums of $16,000 on the policy. Kayla elects to cancel the policy and receive $21,000, the cash surrender value of the policy. How much gross income must Kayla report as taxable income? A. Kayla reports $5,000 of income. B. Kayla reports zero amount of taxable income. C. Kayla reports $21,000 of income. D. Kayla reports $50,000 of income....
Carla is the owner and beneficiary of a $300,000 policy on the life of her father....
Carla is the owner and beneficiary of a $300,000 policy on the life of her father. Carla sells the policy to her sister, Paula, for $100,000. Paula later pays premiums of $45,000. Upon her father's death, how much of the insurance proceeds must Paula include in income? A. $0 B. $155,000 C. $45,000 D. $300,000 16) Mary is the beneficiary of a $500,000 insurance policy on her husband's life. She elects to receive $52,000 per year for 10 years rather...
Sixteen years ago, Ms. Cole purchased a $576,000 insurance policy on her own life and named...
Sixteen years ago, Ms. Cole purchased a $576,000 insurance policy on her own life and named her son as sole beneficiary. She has paid $35,712 total premiums to keep this policy in force. This year, she liquidates the policy for its $44,352 cash surrender value. Does she recognize income on the liquidation? Now assume that Ms. Cole is terminally ill. The insurance policy provides that a person with a life expectancy of less than one year can liquidate the policy...
Naomi was the beneficiary of a $100,000 insurance policy on her mother who died in January...
Naomi was the beneficiary of a $100,000 insurance policy on her mother who died in January 2017. It took the insurance company several months to make the payment so she received $100,206 in May 2017. She was a joint tenant on a bank account with her mother. She inherited the $14,000 in the account that had all been deposited by her mother. After a long battle with her medical insurance company, Naomi received a $7,000 reimbursement in 2017 for an...
7. Victoria cashes in her life insurance policy and receives the cash surrender value of $250,000. She had paid $13...
7. Victoria cashes in her life insurance policy and receives the cash surrender value of $250,000. She had paid $130,000 in premiums. What are the tax consequences to Victoria? a. She recognizes no income from the transaction b. She must include all $250,000 in gross income c. She has income of $130,000 in the current year d. She recognizes $120,000 gain in the current year
Felicia is covered by a $180,000 group term life insurance policy and her daughter is the beneficiary
3. Felicia is covered by a $180,000 group term life insurance policy and her daughter is the beneficiary. Felicia's employer pays the entire cost of the policy for which the uniform annual premium is $8 per $1,000 of coverage. How much of this premium is taxable to Felicia? a. $0 b. $640 c. $1,040 d . $1,440 4. Scott, age 22, is a full-time student at State College and a candidate for a bachelor's degree. During the current year, he received the...
Income. During 2019 David inherited $50,000 from her aunt, and also was the beneficiary of her aunt’s life insurance policy and collected $10,000. How much income does David have for 2022 from these events?
During 2019 David inherited $50,000 from her aunt, and also was the beneficiary of her aunt’s life insurance policy and collected $10,000. How much income does David have for 2022 from these events?
Question 8 (10 points) A term life insurance policy will pay a beneficiary a certain sum...
Question 8 (10 points) A term life insurance policy will pay a beneficiary a certain sum of money upon the death of the policy holder. These policies have premiums that must be paid annually. Suppose a life insurance company sells a $230,000 one year term life insurance policy to a 49-year-old female for $527. According to the National Vital Statistics Report, Vol. 47, No. 28, the probability the female will survive the year is 0.99791. Compute the expected value of...
Sharon transfers to Russ a life insurance policy with a cash surrender value of $48,800 and...
Sharon transfers to Russ a life insurance policy with a cash surrender value of $48,800 and a face value of $146,400 in exchange for real estate. Russ continues to pay the premiums on the policy until Sharon dies 7 years later. At that time, Russ has paid $21,960 in premiums, and he collects the $146,400 face value. How much of the proceeds, if any, is taxable to Russ? Why? Since the policy was transferred for valuable consideration, the proceeds
30. John takes out a life insurance policy on his life naming his wife, Mary, as...
30. John takes out a life insurance policy on his life naming his wife, Mary, as the beneficiary, in the amount of $100,000. On John's death, Mary is paid $100,000 by the insurance company. Mary's taxable income from th receipt of the life insurance proceeds is: a. $100,000 b. $0 c. $100,000 reduced by the total of the premiums John had paid during his life d. 1/2 of the amount received (i.e., $50,000) 31. On November 15, 2018, X Corp.,...
1. Susan is the beneficiary of a $50,000 insurance policy on the life of her mother, Kayla. To date, Kayla has paid premiums of $16,000 on the policy. Kayla elects to cancel the policy and receive $21,000, the cash surrender value of the policy. How much gross income must Kayla report as taxable income? A. Kayla reports $5,000 of income. B. Kayla reports zero amount of taxable income. C. Kayla reports $21,000 of income. D. Kayla reports $50,000 of income....
7. Victoria cashes in her life insurance policy and receives the cash surrender value of $250,000. She had paid $130,000 in premiums. What are the tax consequences to Victoria? a. She recognizes no income from the transaction b. She must include all $250,000 in gross income c. She has income of $130,000 in the current year d. She recognizes $120,000 gain in the current year
Question 8 (10 points) A term life insurance policy will pay a beneficiary a certain sum of money upon the death of the policy holder. These policies have premiums that must be paid annually. Suppose a life insurance company sells a $230,000 one year term life insurance policy to a 49-year-old female for $527. According to the National Vital Statistics Report, Vol. 47, No. 28, the probability the female will survive the year is 0.99791. Compute the expected value of...
Sharon transfers to Russ a life insurance policy with a cash surrender value of $48,800 and a face value of $146,400 in exchange for real estate. Russ continues to pay the premiums on the policy until Sharon dies 7 years later. At that time, Russ has paid $21,960 in premiums, and he collects the $146,400 face value. How much of the proceeds, if any, is taxable to Russ? Why? Since the policy was transferred for valuable consideration, the proceeds
30. John takes out a life insurance policy on his life naming his wife, Mary, as the beneficiary, in the amount of $100,000. On John's death, Mary is paid $100,000 by the insurance company. Mary's taxable income from th receipt of the life insurance proceeds is: a. $100,000 b. $0 c. $100,000 reduced by the total of the premiums John had paid during his life d. 1/2 of the amount received (i.e., $50,000) 31. On November 15, 2018, X Corp.,...
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