Paul owns a $2,000,000 life insurance policy on his own life. Paul sold the policy to his cousin, Sal, for $25,000. Sal continued to pay the $2,000 annual premiums for 5 years until Paul’s death. Upon Paul’s death, Sal collected the $2,000,000 insurance proceeds. How much (if any) does Sal include in his income as a result?

Answer rating: 100% (QA)

Most of the money received from a life insurance policy is not subject to in... View the full answer