Question 7 (3 points) In 2019, Oscar was diagnosed with a terminal illness. His physician estimated...

 

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Question 7 (3 points) In 2019, Oscar was diagnosed with a terminal illness. His physician estimated that Oscar would live no more than 18 months. Oscar cashed in his life insurance policy to pay some medical bills, after he received the doctor's diagnosis. Oscar has paid $25,000 in premiums and he collected $39,000, the cash surrender value of the policy. Sven enjoys excellent health, but he cashed in his life insurance policy to purchase a new home. He had paid premiums of $15,000 and collected $25,000 from the insurance company. a) Neither Oscar nor Sven is required to recognize gross income. b) Oscar must recognize $14,000 ($39,000 - $25,000) and Sven must recognize $10,000 ($25,000 $15,000) gross income. c) Oscar must recognize $14,000 ($39,000 $25,000) of gross income, but Sven does not recognize any gross income. d) Sven must recognize $10,000 ($25,000 $15,000) of gross income, but Oscar does not recognize any gross income. e) None of the above Question 7 (3 points) In 2019, Oscar was diagnosed with a terminal illness. His physician estimated that Oscar would live no more than 18 months. Oscar cashed in his life insurance policy to pay some medical bills, after he received the doctor's diagnosis. Oscar has paid $25,000 in premiums and he collected $39,000, the cash surrender value of the policy. Sven enjoys excellent health, but he cashed in his life insurance policy to purchase a new home. He had paid premiums of $15,000 and collected $25,000 from the insurance company. a) Neither Oscar nor Sven is required to recognize gross income. b) Oscar must recognize $14,000 ($39,000 - $25,000) and Sven must recognize $10,000 ($25,000 $15,000) gross income. c) Oscar must recognize $14,000 ($39,000 $25,000) of gross income, but Sven does not recognize any gross income. d) Sven must recognize $10,000 ($25,000 $15,000) of gross income, but Oscar does not recognize any gross income. e) None of the above

Answer rating: 100% (QA)

Solution The correct answer is B Explanation Here in both the cases no one has died oscar uses ... View the full answer