Question

2-32 Chapter 2 . Gross Income and Exclusions are taxable to the the e following might result in life insurance proceeds that a LO 2.6 14. Which of the following might result i recipient? a. A life insurance policy in which the insured is the ite nsurance poliey in which the insured is the son of the taxpayer and d. A life insurance policy purchased by a taxpayer insuring his or her spouse e. A liensurance policy purchased by a corporation insuring an officer beneficiary is the taxpayer b. A life insurance policy transferred by a partner to the partnership c. A life insurance policy transferred to a creditor in payment of a debt million life insurance policy. Harry elects to receive all $1 million in the curr and spends $200,000 of it on a luxury around-the-world trip with his new girlfrie Harry's gross income from the life insurance is: LO 2.6 15. Hary's witfe Lila passes away in January of the current year. Fortunately, Lila hada a. b. $200,000 d. $1,000,000 receiving the gift? 1. Which of the following gifts would probably be held to be taxable to the person LO 2.7 a. One thousand dollars given to a taxpayer by his or her father b. An acre of land given to a taxpayer by a friend C. A car given to a loyal employee by her supervisor when she retired to recognize her faithful service d. A Mercedes-Benz given to a taxpayer by his cousin e. An interest in a partnership given to a taxpayer by his or her uncle 103717. Which of the following items would be includable in the gross income of the recipient? LO 2.7 LO 2.8 LO 2.9 LO 2.10 a. Insurance payments for medical care of a dependent child b. Insurance payments for loss of the taxpayer's sight c. Season tickets worth $2,000 given to a son by his father d. Payments to a student for working at the student union food court e. Lodging provided to a worker on a remote oil rig 18. Kelly receives a $40,000 scholarship to Tvy University. She uses $30,000 on tuition a LO 2.8 books, $5,000 for a used car, and $5,000 for rent while at school. Kelly will recognize gross income. $0 a. b. $5,000 c. $10,000 d. $30,000 e. $40,000 19. Malin is a married taxpayer and has three dependent children. Malin's employer o LO 2.9 fers health insurance for employees and Malin takes advantage of the benefit entire family (her spouse's employer also offers health insurance but they opt out During the year, Malin paid $1,200 toward her family's health insurance premi through payroll deductions while the employer paid the remaining $9,200. Mains family visited health care professionals numerous times during the year and made tal co-payments toward medical services of $280. Malin's daughter had knee surgery due to a soccer injury and the insurance company paid the hospital $6,700 directly and reimbursed Malin $400 for her out-of-pocket health care expenses surgery. How much income should Malin recognize related to her health insurattce a. b. $9,200 C $14,020 ($9,200 + S6,700 - $1,200 $280 $400) d. $8,000 (59,200-$1,200) e. None of the above

Answer 1

14: The correct option is

c. A life insurance policy transferred to a creditor in payment of debt.

Reason: As per the taxation rules, the life insurance policy proceeds are not to be used to pay for the debts. The beneficiary cannot be creditor.

Note: as per the Chegg guidelines, only first answer has been provided.