$10,000 in net premiums for his universal life insurance policy and took a withdrawal of S4, 000 when the policy's cash value was $11,000. Assuming Bob had never previously taken a cash value withdrawal and the policy is not a modified endowm

$10,000 in net premiums for his universal life insurance policy and took a withdrawal of S4, 000 when the policy's cash value was $11,000. Assuming Bob had never previously taken a cash value withdrawal and the policy is not a modified endowm

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Bob paid $10,000 in net premiums for his universal life insurance policy and took a withdrawal of S4, 000 when the policy's cash value was $11,000. Assuming Bob had never previously taken a cash value withdrawal and the policy is not a modified endowment contract, what amount is taxable to Bob?

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