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Ashley collected $150,000 on her deceased husband's life insurance policy. She elected to collect the policy in 10 equal annual payments of $18,000 each OA) None of the payments must be included in Ashley's gross income O B) The amount she receives in the first year is a nontaxable return of capital OC) For each $18,000 payment that Iris receives, she will include the entire amount as taxable income. OD) For each $18,000 payment that Iris receives, she can exclude $15,000 ($150,000/$180,000 $18,000) from gross income.

Ashley collected $150,000 on her deceased husband's life insurance policy. She elected to collect the policy in 10 equal annual payments of $18,000 each OA) None of the payments must be included in Ashley's gross income O B) The amount she receives in the first year is a nontaxable return of capital OC) For each $18,000 payment that Iris receives, she will include the entire amount as taxable income. OD) For each $18,000 payment that Iris receives, she can exclude $15,000 ($150,000/$180,000 $18,000) from gross income.

FINANCIAL ACCOUNTING
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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Ashley collected $150,000 on her deceased husband's Mo insurance policy. She elected to collect the policy in 10 equal annual payments of $18,000 each A) None of the payments must be included in Ashley's gross income OB) The amount she receives in the first year is a nontaxable return of capital OC) For each $18,000 payment that Iris receives, she will include the entire amount as taxable income. OD) For each $18,000 payment that Ins receives, she can exclude $15,000 ($150,000/$180,000 $18,000) from gross income.
Transcribed Image Text:Ashley collected $150,000 on her deceased husband's Mo insurance policy. She elected to collect the policy in 10 equal annual payments of $18,000 each A) None of the payments must be included in Ashley's gross income OB) The amount she receives in the first year is a nontaxable return of capital OC) For each $18,000 payment that Iris receives, she will include the entire amount as taxable income. OD) For each $18,000 payment that Ins receives, she can exclude $15,000 ($150,000/$180,000 $18,000) from gross income.
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