Ursula is employed by USA Corporation. USA Corporation provides medical and health, disability, and group term life
Question:
Ursula is employed by USA Corporation. USA Corporation provides medical and health, disability, and group term life insurance coverage for its employees. Premiums attributable to Ursula were as follows:
Medical and health.................................................................... $3,600
Disability........................................................................................... 300
Group term life (face amount is $40,000)..................................... 200
During the year, Ursula suffered a heart attack and subsequently died. Before her death, Ursula collected $14,000 as a reimbursement for medical expenses and $5,000 of disability income. Upon her death, Ursula’s husband collected the $40,000 face value of the life insurance policy.
a. What amount can USA Corporation deduct for premiums attributable to Ursula?
b. How much must Ursula include in income relative to the premiums paid?
c. How much must Ursula include in income relative to the insurance benefits?
d. How much must Ursula’s widower include in income?
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... 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...
Step by Step Answer:
a 4100 3600 300 200 The full amount of premiums paid on Urselas behalf is deductible b ...View the full answer
Federal Taxation 2018 Comprehensive
ISBN: 9780134532387
31st Edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson
