Ann, who is age 22, just returned to the work force last week after giving birth to twins. She has limited disposable income. She is healthy now but her family history indicates the incidence of stroke. She would like some insurance coverage for her children’s education in the event of her death. What kind of plan would you recommend to Cindy

Ann, who is age 22, just returned to the work force last week after giving birth to twins. She has limited disposable income. She is healthy now but her family history indicates the incidence of stroke. She would like some insurance coverage for her children’s education in the event of her death. What kind of plan would you recommend to Cindy

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A friend, explaining his position with respect to liability insurance, states, “I don’t feel I need the high limits of liability because I don’t make that much money. If I were a doctor or a lawyer, I would carry higher limits of liability coverage, but since I am not, the $100,000 minimum included in my homeowner’s policy is enough.” Do you agree or disagree? Why?
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Would you sign this return if you were Tom and Teri’s Paid Tax Preparer? Why or why not? Your clients, Tom (age 48) and Teri (age 45) Trendy, have a son, Tim (age 27). Tim lives in Hawaii, where he studies the effects of various sunscreens on his ability to surf. Last year, Tim was out of money and wanted to move back home and live with Tom and Teri. To prevent this, Tom lent Tim $20,000 with the understanding that he would stay in Hawaii and not come home. Tom had Tim sign a formal note, including a stated interest rate and due date. Tom has a substantial portfolio of stocks and bonds and has generated a significant amount of capital gains in the current year. He concluded that Tim is a deadbeat and the $20,000 note is worthless. Consequently, Tom wants to his son’s bad debt on his and Teri’s current tax return and net it against his other capital gains and losses. Tom is adamant about this!
Dr. Francis Ong, MD got voluntary retirement at the age of 55 years from a renowned hospital. He was residing in a condo unit which is surrounded by a slum which is inhabited by economically weaker strata of the society. As the people in that area were not aware about importance of health care, a widespread ailment had been persistently prevailing. Dr. Ong, met with some of the well-off people of condominium and decided to open a clinic called MEDIFREE to provide them cost free medical assistance and make them aware about hygienic living, physical fitness, and economic balance diet. Many of the condo residents agreed to it. He approached health department of the town with his proposal which was accepted and an initial one time grant of P200,000 was given immediately for purchase of medical equipment and test kits for pathological tests. 10 members of the condo contributed P2,000 each as lifetime subscription to the clinic. Dr. Ong decided to charge P10 as one time registration fee…
As a result of a cancer diagnosis in early 2023, Laura has begun chemotherapy treatments. A cancer specialist has stated that Laura has less than one year to live. She has incurred many medical bills and other general living expenses and is in need of cash. So she is considering selling stock that cost $35,000 and has a fair market value of $50,000. This amount would be sufficient to pay her medical bills. However, she has read about a company (the Vital Benefits Company) that would purchase her life insurance policy for $50,000. She has paid $30,000 in premiums on the policy. Question Content Area a. Considering only the tax effects, would selling the stock or selling the life insurance policy result in more beneficial tax treatment? Assume Laura is diagnosed as “terminally ill". The sale of the stock by Laura will result in of $fill in the blank f5c4d1fb0fa9ffa_2. The sale of the life insurance policy will result in gain of $fill in the blank f5c4d1fb0fa9ffa_4.…
Upon Jena’s retirement, the couple plans to relocate their home close to the beach. For this purpose, they intend to buy a house near the beach and a rental property (to fund their retirement). They do not have the funds to make these purchases. Please explain to the couple the downsizing retirement strategy most appropriate to their circumstance.
Tt1.
Shaan and Anita are married and have two children, ages 8 and 10. Anita is a "nonworking" spouse who devotes all of her time to household activities. Estimate how much life insurance Shaan and Anita should carry. Insurance need
Juanita is the owner of a 30-year-old home, and is looking to buy a homeowner’s insurance policy. The previous home she owned was severely damaged by a tree falling through the roof, a peril that was not covered by her basic-form policy, therefore she is looking to buy a comprehensive policy that covers damage from all perils (except those specifically excluded). Based on the peril coverage it offers, she purchases an insurance policy.
Sven was recently quoted on a disability policy with an any occupation definition of disability. Sven does want to buy disability coverage, however, the premium was more than he was willing to pay. Sven has some savings built up as an emergency fund and manages his cash flow quite well, so he knows what premium he can afford without impacting his standard of living. What change could Sven consider that would reduce his premium but allow for coverage to continue to meet his objective? a) He could increase the elimination period of the policy b) He could increase the length of his benefit period. c) He could change the definition to own occupation. d) He could decrease the waiting period.
Janey, a college student, is on her own financially. She is much too busy with school to hold down any kind of traditional job. However, she does list herself on a number of dating websites and every weekend makes time to see one or more gentlemen. Janey googles all of her potential matches before agreeing to go out in order to confirm a high net worth or income. “I expect a gentleman to be generous,” she says to every potential date. She refuses to go out with anyone who hesitates at that. Janey never does anything illegal but at the same time isn’t shy about showing her appreciation for all she receives. One gentleman pays the rent on her apart-ment. Another pays her tuition for her. A third bought her a car. Some just give her cash... (a) It's 100% certain that everything Janey receives from these gentlemen qualifies as gifts as that term is used in the tax law and so would not need to be reported as “Other income” on her federal income tax return. (b) It's 100% certain…