Betty owed Martha $ 5,000. In payment of this debt, Betty transferred to Martha a life insurance

Question:

Betty owed Martha $ 5,000. In payment of this debt, Betty transferred to Martha a life insurance policy on Betty, with a cash surrender value of $ 5,000. The face value of the policy is $ 100,000. Martha names herself as beneficiary of the policy and continues to make the premium payments. After Martha has paid $ 15,000 in premiums, Betty dies and Martha collects $ 100,000. Is any of the $ 100,000 Martha received taxable? In answering this case, use an online tax service with only the Internal Revenue Code database selected. State your keywords and which online tax service you used to arrive at your answer.

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...