Maria has spent over $100,000 on medical bills and a nurse aid who lives in herhouse. She has been chronically ill for several months. She owns a $1,000,000 lifeinsurance policy. Due to her chronic illness, Maria expects to have an additional$600,000 in medical bills in the current year. She has asked that the life insurancepolicy pay the $1,000,000 to her now. If Maria receives $1,000,000, how much canshe exclude from her income?OA) $700,000OB) $0OC) $100,000OD) $1,000,000

D) $1,000,000Explanation:Step 1:The answer to Maria's situation involves understanding the tax…

Answered: Maria has spent over $100,000 on…

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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Tom and Tina are updating their financial plan and are concerned that they might not have enough life insurance coverage for their family, which includes two children, ages 4 and 10. They have determined that their annual income is $70,000 and their net worth is now $150,000. What is the amount of life insurance they should carry using the easy method?
John and Tara Smith are married and have lived in the same home for over 20 years. John's uncle Tim, who is 64 years old, has lived with the Smiths since March of this year. Tim is searching for employment but has been unable to find any-his gross income for the year is $2,000. Tim used all $2,000 toward his own support. The Smiths provided the rest of Tim's support by providing him with lodging valued at $5,000 and food valued at $2,200. Assume the original facts except that Tim earned $10,000 and used all the funds for his own support. Assume the original facts except that Tim is a friend of the family and not John's uncle
Tamar owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following expenses in connection with her condo Insurance Advertising expense Mortgage interest Property taxes Repairs & maintenance : Utilities Depreciation $1,100 550 3,850 945 700 1,000 9,500 During the year, Tamar rented out the condo for 75 days, receiving $10,000 of gross income. She personally used the condo for 35 days during her vacation. Tamar's itemized deduction for nonrental taxes is less than $10,000 by more than the property taxes allocated to the rental use of the property. Problem 14-58 Parts a, b, c, d & e (Algo) Assume Tamar uses the IRS method of allocating expenses to rental use of the property. Required: a. What is the total amount of for AGI (rental) deductions Tamar may deduct in the current year related to the condo? b. What is the total amount of itemized deductions Tamar may deduct in the current year related to the condo? c. If Tamar's basis in the condo at the beginning of the…
LO.2 Valentino is a patient in a nursing home for 45 days of 2020. While in the nursing home, he incurs total costs of $13,500. Medicare pays $8,000 of the costs. Valentino receives $15,000 from his long-term care insurance policy, which pays while he is in the facility. Assume that the Federal daily excludible amount for Valentino is $380. Of the $15,000, what amount may Valentino exclude from his gross income?
Tina, your client, is the 55-year-old widow of Paul, who was 58 years old when he died earlier this year. Ed, age 35, is their only child. Tina is the primary beneficiary and Ed is the contingent beneficiary of Paul's IRA, which is worth $400,000. Which one of the following planning techniques will accomplish Tina's goal of deferring taxes for as long as possible on Paul's IRA? A) beginning payments to Tina based on her remaining life expectancy B) beginning payments to Ed based on his life expectancy C) initiating a dependent rollover to Ed D) doing a rollover to Tina's IRA
Yumi's grandparents presented her with a gift of $21,000 when she was 8 years old to be used for her college education. Over the next 9 years, until she turned 17, Yumi's parents had invested her money in a tax-free account that had yielded interest at the rate of 3.5%/year compounded monthly. Upon turning 17, Yumi now plans to withdraw her funds in equal annual installments over the next 4 years, starting at age 18. If the college fund is expected to earn interest at the rate of 4%/year, compounded annually, what will be the size of each installment? (Assume no interest is accrued from the point she turns 17 until she makes the first withdrawal. Round your answer to the nearest cent.)
Your mother's employer offers a tax-deferred retirement plan (a 401-b plan, which was authorized by Congress to encourage savings) which would permit her to invest, tax-free until she retires, up to 15 percent of her salary. Once you are out of school (one year from today), she figures she can save $1,000 every 6 months, or $2,000 per year. The insurance company which manages the retirement fund promises to pay a stated (or simple) rate of 12 percent per year, but with quarterly compounding. If your mother invests $1,000 each six months, starting six months after you graduate (or 18 months from today), how much will she have 5 years from now, assuming the last payment is made at the end of Year 5? (Hint: She will make a total of 8 payments.) Group of answer choices $9,929 $12,300 $12,462 $9,897 $10,000
Max, age 28, is insured under an individual medical expense policy that is part of a preferred provider organization (PPO) network. The policy has a calendar- year deductible of $1,000, 75/25 percent coinsurance, and an annual out-of-pocket limit of $2,000. Max recently had outpatient arthroscopic surgery on his knee, which he injured in a skiing accident. The surgery was performed in an outpatient surgical center. Max incurred the following medical expenses. (Assume that the charges shown are the charges approved by Max s insurer and that all providers are in the PPO network.) Outpatient X-rays and diagnostic tests................................................ $800 Covered charges in the surgical center ................................................ $12,000 Surgeon s fee.............................................................................. $3,000 Outpatient prescription drugs............................................................ $400 Physical…
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Bha
Hana's only child, Kwan, passed away last year at the age of 42. Kwan had been diagnosed with a severe disability as a child and was financially and physically dependent on Hana his entire life. Hana opened an RDSP for Kwan nine years ago and contributed a total of $27,000 to the account. Hana's contributions attracted total Canada Disability Savings Grants (CDSG) of $6,000. The RDSP had a balance of $42,000 when Kwan died. What is the tax impact resulting from Kwan's death? Question 20 options: Kwan's estate will receive taxable income of $9,000 and non-taxable income of $ 27,000. Kwan's estate will receive taxable income of $15,000 and Hana will receive non-taxable income of $27,000. Kwan's estate will receive taxable income of $27,000 and non-taxable income of $15,000.

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