Julie is the insured on a $300,000 ordinary life insurance policy. Julie sells her life insurance...
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Julie is the insured on a $300,000 ordinary life insurance policy. Julie sells her life insurance policy to Ben for $20,000. Ben promptly named himself beneficiary. The policy had a cash surrender value of $10,000 at the time of the sale. Julie died three years after selling the policy to Ben. Ben had paid $2,500 in premiums and received $1,500 in dividends during the three years in which he owned the policy. The insurance company paid $300,000 in death proceeds to Ben. How much, if any, of the death proceeds are taxable to Ben for federal income tax purposes? $277,500 $279,000 $0 $269,000 $300,000 Julie is the insured on a $300,000 ordinary life insurance policy. Julie sells her life insurance policy to Ben for $20,000. Ben promptly named himself beneficiary. The policy had a cash surrender value of $10,000 at the time of the sale. Julie died three years after selling the policy to Ben. Ben had paid $2,500 in premiums and received $1,500 in dividends during the three years in which he owned the policy. The insurance company paid $300,000 in death proceeds to Ben. How much, if any, of the death proceeds are taxable to Ben for federal income tax purposes? $277,500 $279,000 $0 $269,000 $300,000
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According to the income tax act the death benefit tha... View the full answer
Related Book For
Principles of Risk Management and Insurance
ISBN: 978-0132992916
12th edition
Authors: George E. Rejda, Michael McNamara
Posted Date:
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