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Donald was killed in an accident while he was on the job. Darlene, Donald's wife, received several payments as a result of Donald's death. Review
Donald was killed in an accident while he was on the job. Darlene, Donald's wife, received several payments as a result of Donald's death. Review the payments below and then enter the amount to be included in Darlene's gross income in the table provided.
- Donald's employer paid Darlene an amount equal to Donald's three months' salary ($55,800), which is what the employer does for all widows and widowers of deceased employees.
- Donald had $24,800 in accrued salary that was paid to Darlene.
- Donald's employer had provided Donald with group term life insurance of $195,000, which was payable to his widow in a lump sum. Premiums on this policy totaling $22,300 had been included in Donald's gross income under 79.
- Donald had purchased a life insurance policy (premiums totaled $168,000) that paid $394,000 in the event of accidental death. The proceeds were payable to Darlene, who elected to receive installment payments as an annuity of $31,000 each year for a 20-year period. She received her first installment this year.
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