Carla is the owner and beneficiary of a $300,000 policy on the life of her father. Carla sells the policy to her sister, Paula, for $100,000. Paula later pays premiums of $45,000. Upon her father's death, how much of the insurance proceeds must Paula include in income? A. $0 B. $155,000 C. $45,000 D. $300,000

16) Mary is the beneficiary of a $500,000 insurance policy on her husband's life. She elects to receive $52,000 per year for 10 years rather than receive the entire $500,000 in a lump sum. Of the amount received each year:

A. $5,000 per year is tax free as a death benefit.

B. $52,000 is taxable income.

C. $2,000 is taxable income.

D. $50,000 is taxable income.