a. In September 2021, Thomas died. His wife was the beneficiary of his $50,000 life insurance policy. Thomas had paid $20,000 in premiums. His wife elected to collect the proceeds in ten equal installments of $6,500 ($5,000 on the face amount of the policy and $1,500 interest). Of the $6,500 she collected in 2021, the nontaxable amount is:

		$0
		$5,000
		$1,500
		$6,500

b.

Adam repairs power lines for the Egret Utilities Company. Generally, he is out on calls during the lunch hour and brings lunch from home. In the current year, the company paid Adam $800 to cover his cost of lunch meals eaten. Which statement below is correct?

		Adam is not required to recognize any income unless his actual cost of the meals was less than $800.
		Adam is not required to recognize any income from the above, if he worked so far from his home that it was not practical to go home for lunch.
		If Adam's actual cost of the meals exceeded $800, Adam can deduct the additional amount.
		Adam must include the $800 in his gross income.