Income Tax Fundamentals 2020
38th Edition
ISBN: 9780357391129
Author: WHITTENBURG
Publisher: Cengage
expand_more
expand_more
format_list_bulleted
Question
Chapter 2, Problem 15MCQ
To determine
Concept Introduction:
The life insurance proceeds are received by the relative after the death of the insured person. The amount received is not taxable to the person receiving it. The amount is also not taxable in the hands of the nominee.
To choose:The case in which proceeds from life insurance shall be taxable in the hands of the recipient.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
If insurance proceeds are paid out to the beneficiaries, and the IRS later becomes aware that the benefits were subject to the estate tax:
Select one:
a. the IRS can follow (and attempt to collect) the life insurance proceeds as far as it can trace them
b. the IRS may only collect the amount owed from the executor of the estate.
c. the IRS may only collect the amount owed from the executor of the estate and any beneficiaries who received payment.
d. the insurer may be liable for the tax owed.
life insurance proceeds paid to a beneficiary because of the insured's death is taxable.
true or false
TRUE OR FALSE:
A Registered Retirement Savings Plan is
considered to be a spousal Registered
Retirement Savings Plan if a spouse or
common-law partner has made any
contributions to the plan at any time since its
inception.
Chapter 2 Solutions
Income Tax Fundamentals 2020
Ch. 2 - The definition of gross income in the tax law is:...Ch. 2 - Prob. 2MCQCh. 2 - Prob. 3MCQCh. 2 - Prob. 4MCQCh. 2 - Prob. 5MCQCh. 2 - Which of the following items would be included in...Ch. 2 - Malin is a married taxpayer and has three...Ch. 2 - George works at the Springfield Nuclear Plant as a...Ch. 2 - Prob. 9MCQCh. 2 - Which of the following will result in the...
Ch. 2 - Prob. 11MCQCh. 2 - Prob. 12MCQCh. 2 - A 64 -year-old taxpayer retires this year and...Ch. 2 - Prob. 14MCQCh. 2 - Prob. 15MCQCh. 2 - Harry's wife Lila passes away in January of the...Ch. 2 - Nomi is in the highest individual tax bracket and...Ch. 2 - Prob. 18MCQCh. 2 - Prob. 19MCQCh. 2 - Prob. 20MCQCh. 2 - Kelly receives a $40,000 scholarship to Ivy...Ch. 2 - Hillary gets divorced in 2016 and is required to...Ch. 2 - Prob. 23MCQCh. 2 - Prob. 24MCQCh. 2 - Prob. 25MCQCh. 2 - Prob. 26MCQCh. 2 - Prob. 27MCQCh. 2 - Prob. 28MCQCh. 2 - During 2019, Carl (a single taxpayer) has a salary...Ch. 2 - Prob. 30MCQCh. 2 - Alicia loses her job part way through 2019. Her...Ch. 2 - Prob. 32MCQCh. 2 - Prob. 33MCQCh. 2 - Dana and Larry are married and live in Texas. Dana...Ch. 2 - Which of the following conditions need not be...Ch. 2 - Indicate whether each of the items listed below...Ch. 2 - Jane is a roofing contractor. Jane's friend needed...Ch. 2 - Prob. 3PCh. 2 - Prob. 4PCh. 2 - Prob. 5PCh. 2 - Prob. 6PCh. 2 - Prob. 7PCh. 2 - Prob. 8PCh. 2 - Linda and Richard are married and file a joint...Ch. 2 - Prob. 10PCh. 2 - Prob. 11PCh. 2 - Prob. 12PCh. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - Greg died on July 1,2019 , and left Lea, his wife,...Ch. 2 - Prob. 16PCh. 2 - Prob. 17PCh. 2 - How are qualified dividends taxed in 2019? Please...Ch. 2 - Describe the methods that an individual taxpayer...Ch. 2 - Prob. 20PCh. 2 - Vandell is a taxpayer in the 25 percent tax...Ch. 2 - Karen is a wealthy retired investment advisor who...Ch. 2 - Prob. 23PCh. 2 - Prob. 24PCh. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Answer the following questions: Under a 2017...Ch. 2 - Arlen is required by his 2019 divorce agreement to...Ch. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - Lydia, a married individual, was unemployed for a...Ch. 2 - During the 2019 tax year, Brian, a single...Ch. 2 - Prob. 34P
Knowledge Booster
Similar questions
- Which one of the following statements identifies a purpose or characteristic of a survivorship life insurance policy? A) The premium will be more than the combined premiums on separate policies for each of the insured parties. B) A purpose is to provide estate liquidity at the death of the survivor of the insured parties. C) When the insured parties are a husband and wife, a purpose can be to allow the first spouse to die to receive the death proceeds free of transfer tax. D) The underwriting will concentrate most on the insured party that is likely to die first.arrow_forwardWhich of the following life insurance proceeds is not included in the gross estate of the deceased? A. Insurance proceeds with SSS.B. Insurance proceeds where the beneficiary is a third person revocably appointed.C. Insurance proceeds under a group insurance taken out by the employee for himself as beneficiary.D. Insurance proceeds covering the life of the insured decedent where the estate of the deceased, hisexecutor or administrator is the beneficiary whether or not the insured retained the power of revocation.arrow_forwardWhich of the following does not have a legitimate insurable interest? A) An individual on the life of his mistress B) An individual on his own life C) An individual on the life of his spouse D) A finance company on the life of its borrowerarrow_forward
- When a taxpayer owns shares in a mutual fund company, the taxpayer may receive a Form from the mutual fund company, showing that the taxpayer received some capital gains distributions from the mutual fund company.arrow_forwardIf an individual renders services for a creditor who in consideration thereof cancels his existing debt, the cancellation of indebtedness may amount to a Gift Donation intervivos Payment of income Capital contributionarrow_forwardCan a partnership assume liabilities as part of one of the partners contributions?arrow_forward
- For purposes of determining income eligibility for the premium tax credit, household AGI is AGI for the taxpayer and spouse AGI for the taxpayer, spouse, and any other household members required to file a tax return AGI for the taxpayer, spouse, and any other household members required to file a tax return plus any tax-exempt income AGI for the taxpayer, spouse, and any other household members required to file a tax return plus any tax-exempt income and untaxed Social Security benefitsarrow_forwardWhich of the following is true about the self-employed health insurance deduction? The deduction can be claimed when a subsidized employer health insurance plan is also available. The deduction can be claimed if the taxpayer has an overall business loss from self-employment. Long-term care premiums may not be deducted within specified dollar limitations based on age. The self-employed health insurance deduction is a for AGI deduction. Dental insurance is not included as deductible self-employed health insurance.arrow_forwardWhich of the following, when provided by an employer, is a tax-deferred or tax-free benefit for the employee? a. Premiums for private health care plans providing extended health coverage beyond a public plan b. Financial counselling services not connected to re-employment or retirement c. Group term life insurance policy d. A $200 cash gift for the employee's weddingarrow_forward
- Which of the following are nontax characteristics of a qualified terminable interest property (QTIP) trust? The income may go to multiple beneficiaries. The donor or decedent's executor qualifies the trust assets for the marital deduction by making a timely election The principal of the trust is paid to the surviving spouse's estate if the election to qualify the assets for the marital deduction was not made upon creation of the trust. The grantor of the trust determines who receives the remainder interest in the trust assets. A)II, III, and IV B)I and III C)IV only D)II and IVarrow_forwardWhich of the following is not part of decedent’s interest for estate tax purposes? A. Income that have accrued after the death of the decedent.B. Partnership profits that have accrued before the death of partner.C. Proceeds of life insurance policy payable to a revocable beneficiary.D. Dividends declared by a corporation before death of stockholder although paid after death, if thedecedent was living on the record date.arrow_forwardThe following are exclusions from gross income, except Proceeds of life insurance policies. Retirement benefits. Prizes and winnings. Gifts, bequests and devises.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
