Chapter 5, Problem 70P

This year, Janelle received $200,000 in life insurance proceeds. Under the following scenarios, how much of the $200,000 is taxable?

1. a) Janelle received the proceeds upon the death of her father, Julio.
2. b) Janelle received the $200,000 proceeds because she was diagnosed with colon cancer (life expectancy of six months), and she needed the proceeds for her care.
3. c) The proceeds related to a life insurance policy she purchased for $35,000 from a friend in need. After purchase, Janelle paid annual premiums that total $22,000.