Nancy, who is 59 years old, is the beneficiary of a $235,000 life insurance policy. What amount of the insurance proceeds is taxableunder each of the following scenarios?Note: Do not round any intermediate division. Round your final answer to the nearest whole dollar amount.a. She receives the $235,000 proceeds as a lump-sum payment.b. She receives the proceeds at the rate of $4,525 a month for five years.c. She receives the proceeds in monthly payments of $1,370 over her remaining life expectancy (assume she will live 25 years).d. Use the information from (c). If Nancy lives beyond her 25-year life expectancy, what amount of each monthly payment will betaxable in the 26th year?a. Taxable insurance proceedsb. Taxable insurance proceeds per monthc. Taxable insurance proceeds per monthd. Taxable insurance proceeds per month$

The lumpsum insurance policy amount receipt is taxable over $…

Answered: MCIVTOMOM OM+ DIMIY SE5% 09 EN

Business

Accounting

MCIVTOMOM OM+ DIMIY SE5% 09 EN

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 52P

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Question

Nancy, who is 59 years old, is the beneficiary of a $235,000 life insurance policy. What amount of the insurance proceeds is taxable
under each of the following scenarios?
Note: Do not round any intermediate division. Round your final answer to the nearest whole dollar amount.
a. She receives the $235,000 proceeds as a lump-sum payment.
b. She receives the proceeds at the rate of $4,525 a month for five years.
c. She receives the proceeds in monthly payments of $1,370 over her remaining life expectancy (assume she will live 25 years).
d. Use the information from (c). If Nancy lives beyond her 25-year life expectancy, what amount of each monthly payment will be
taxable in the 26th year?
a. Taxable insurance proceeds
b. Taxable insurance proceeds per month
c. Taxable insurance proceeds per month
d. Taxable insurance proceeds per month
$

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