South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
42nd Edition
ISBN: 9781337702546
Author: James C. Young, William H. Hoffman, William A. Raabe, David M. Maloney, Annette Nellen
Publisher: Cengage Learning
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Question
Chapter 5, Problem 29P
a.
To determine
Determine, whether selling of stock or the life insurance policy would result in more tax beneficial for L.
b.
To determine
Determine which mode means of raising the cash would be more beneficial for L regarding the tax treatment.
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As a result of a cancer diagnosis in early 2023, Laura has begun chemotherapy treatments. A cancer specialist has stated that Laura has less than one year to live. She has incurred many medical bills and other general living expenses and is in need of cash. So she is considering selling stock that cost $35,000 and has a fair market value of $50,000. This amount would be sufficient to pay her medical bills. However, she has read about a company (the Vital Benefits Company) that would purchase her life insurance policy for $50,000. She has paid $30,000 in premiums on the policy.
Question Content Area
a. Considering only the tax effects, would selling the stock or selling the life insurance policy result in more beneficial tax treatment? Assume Laura is diagnosed as “terminally ill".
The sale of the stock by Laura will result in
of $fill in the blank f5c4d1fb0fa9ffa_2.
The sale of the life insurance policy will result in
gain of $fill in the blank f5c4d1fb0fa9ffa_4.…
Titan completes a $300,000 life insurance application form with his insurance agent Esther. Esther
informs him that the insurer will request an attending physicians' statement (APS). Titan inquires about
the purpose of an APS.
Which of the following is Titan's CORRECT response?
Select one correct answer from the list
1. An APS is needed to obtain a summary of Titan's medical history.
2 An APS is needed to obtain a summary of Titan's family medical history.
3.
4.
An APS is needed to obtain more information about Titan's lifestyle.
An APS is needed to find out why Titan's driver's license was suspended.
000 0
30
After reviewing her financial affairs, Jasmine has determined that she would like the $75,000 death benefit from one of her insurance policies to go to a local registered charity. The whole life
policy in question has a $45,000 cash surrender value (CSV) and she pays an annual premium of $500. Jasmine's current cash flow situation is quite good. She is living a comfortable retirement.
However, she is worried as she has assets, that of the taxes that will be payable after her death will result in considerable capital gains.
She is unable to purchase a new life insurance to cover the income tax triggered at death because of her health.
What should Jasmine do to fulfill her desire to donate $75,000 to the registered charity and alleviate the taxes payable following her death?
NVBDQncreUJQWW1 Ya0w4cWZjYVhIQT09 →
a. O Surrender the life insurance policy and donate the CSV.
b. O
Name the registered charity as beneficiary of the life insurance policy.
c. O
Assign the life insurance policy…
Chapter 5 Solutions
South-Western Federal Taxation 2019: Individual Income Taxes (Intuit ProConnect Tax Online 2017 & RIA Checkpoint 1 term (6 months) Printed Access Card)
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - Prob. 3DQCh. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Holly was injured while working in a factory and...Ch. 5 - Prob. 9DQCh. 5 - Prob. 10DQ
Ch. 5 - Ted works for Azure Motors, an automobile...Ch. 5 - Prob. 12DQCh. 5 - Eagle Life Insurance Company pays its employees...Ch. 5 - Several of Egret Companys employees have asked the...Ch. 5 - Prob. 15DQCh. 5 - Tammy, a resident of Virginia, is considering...Ch. 5 - Andrea entered into a 529 qualified tuition...Ch. 5 - Prob. 18DQCh. 5 - Prob. 19DQCh. 5 - Prob. 20CECh. 5 - Prob. 21CECh. 5 - Ellie purchases an insurance policy on her life...Ch. 5 - Prob. 23CECh. 5 - Leland pays premiums of 5,000 for an insurance...Ch. 5 - Jarrod receives a scholarship of 18,500 from...Ch. 5 - Prob. 26CECh. 5 - Prob. 27PCh. 5 - Prob. 28PCh. 5 - Prob. 29PCh. 5 - Prob. 30PCh. 5 - Prob. 31PCh. 5 - Prob. 32PCh. 5 - Prob. 33PCh. 5 - Prob. 34PCh. 5 - LO.2 Leigh sued an overzealous bill collector and...Ch. 5 - LO.2 Determine the effect on gross income in each...Ch. 5 - Prob. 37PCh. 5 - Prob. 38PCh. 5 - Prob. 39PCh. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - LO.2 Does the taxpayer recognize gross income in...Ch. 5 - Prob. 43PCh. 5 - Prob. 44PCh. 5 - Prob. 45PCh. 5 - LO.2, 5 Rosas employer has instituted a flexible...Ch. 5 - Prob. 47PCh. 5 - Prob. 48PCh. 5 - Prob. 49PCh. 5 - Prob. 50PCh. 5 - Prob. 51PCh. 5 - Prob. 52PCh. 5 - Prob. 53PCh. 5 - Prob. 54PCh. 5 - Prob. 55PCh. 5 - Prob. 56PCh. 5 - Prob. 57PCh. 5 - Prob. 59CPCh. 5 - Prob. 1RPCh. 5 - Prob. 2RPCh. 5 - Prob. 3RPCh. 5 - Prob. 4RPCh. 5 - Prob. 1CPACh. 5 - Linda is an employee of JRH Corporation. Which of...Ch. 5 - Kim was seriously injured at her job. As a result...Ch. 5 - Danny received the following interest and dividend...Ch. 5 - Prob. 5CPA
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