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1. Susan is the beneficiary of a $50,000 insurance policy on the life of her mother, Kayla. To date, Kayla has paid premiums of $16,000
1. Susan is the beneficiary of a $50,000 insurance policy on the life of her mother, Kayla. To date, Kayla has paid premiums of $16,000 on the policy. Kayla elects to cancel the policy and receive $21,000, the cash surrender value of the policy. How much gross income must Kayla report as taxable income? A. Kayla reports $5,000 of income. B. Kayla reports zero amount of taxable income. C. Kayla reports $21,000 of income. D. Kayla reports $50,000 of income. 2. Cindi receives a $5,000 basketball scholarship to attend North Central University. The scholarship covers tuition, books, and fees. She also received another scholarship of $8,000 for room and board. How much of this scholarship is taxable to Cindi? A. $0 B. $5,000 C. $8,000 D. $13,000 Freddie suffers a stroke and is moved into a nursing home for 130 days. The total cost of his stay is $45,000. His long-term care insurance contract reimbursed him $52,000. How much of this reimbursement is taxable to Freddie? A. $0 B. $3,900 C. $48,100 D. $52,000 Nadal is a "C" Corporation and owns 75% of another corporation, Raffi. Raffi issues a dividend to Nadal What percentage of the dividend can Nadal exclude from its gross income. A. 0% B. 20% C. 65% D. 100% 5. In addition to a qualifying child, a qualifying relative can be a dependent. To be a qualifying relative, which of these is NOT one of the three additional tests a qualifying relative must meet
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