43. Employee Benefits. 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, Ursulas 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 Ursulas widower include in income?

48. After a brief illness, Bill died. Bill s employer paid $20,000 to his widow. The corporation sent along a letter with the check indicating that $5,000 represented pay-ment for Bill s accrued vacation days and back wages. The balance was being awarded in

recognition of Bill s many years of loyal service. The company was obligated to pay the

accrued vacation days and back wages, but the balance was discretionary.

a. Is the employer entitled to deduct the $20,000 paid to Bill s widow?

b. Is Bill s widow required to include the $20,000 in her gross income?