question number to mark it for review. Prev - allows you to go back to the previous question. Next - saves your answer and allows you to go to the next question. View Summary - allows you to view your answer choices and those you marked for review. Submit Now - submits your answer choices for grading. Close - exits the exam. 5 Jason, age 52, is policyholder of an exempt universal life (UL) insurance policy with a face value of $220,000, a cash surrender value (CSV) of $60,000, and an adjusted cost basis (ACB) of $20,000. The life insured on the policy is Jason's son, Hudson, age 21. Which of the following CORRECTLY describes the outcome if Jason transfers ownership of the policy to Hudson for no consideration (i.e. if Hudson does not pay Jason for acquiring the policy)? Oa) Jason incurs a taxable policy gain of $40,000 and Hudson acquires the policy with an ACB of $20,000. Ob) Jason incurs a taxable policy gain of $40,000 and Hudson acquires the policy with an ACB of $60,000. Oc) Jason does not incur a taxable policy gain and Hudson acquires the policy with an ACB of $20,000. Od) Jason does not incur a taxable policy gain and Hudson acquires the policy with an ACB of $60,000. Prev Next View Summary Close