Question: Betty owed Martha 5 000 In payment of this debt

Betty owed Martha $ 5,000. In payment of this debt, Betty transferred to Martha a life insurance policy on Betty, with a cash surrender value of $ 5,000. The face value of the policy is $ 100,000. Martha names herself as beneficiary of the policy and continues to make the premium payments. After Martha has paid $ 15,000 in premiums, Betty dies and Martha collects $ 100,000. Is any of the $ 100,000 Martha received taxable? In answering this case, use an online tax service with only the Internal Revenue Code database selected. State your keywords and which online tax service you used to arrive at your answer.

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  • CreatedOctober 30, 2015
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