In each of the following independent cases, indicate

the amount that the taxpayer should report as "gross

income" for the year.

a$)$ McAdams surrendered his life insurance policy and

received a lump sum of $$8,000.$ He paid total premiums

of $$7,200$ on the policy in previous years.

b$)$ Mr$.$ Nelson lent $$5,000$ to his neighbor, Jones.

Jones ran into financial difficulty, so he agreed to

assign a life insurance policy to Nelson naming Nelson

beneficiary. Face amount of the policy was $$7,000.$

After receiving the policy, Nelson paid premiums of

$$420.$ This year, Jones died and Nelson received a

check for $$7,000$ from the insurance company.

c$)$ Raymond transferred a life insurance policy on his

life, face value $$100,000,$ cash value of $$22,000,$ to a

partnership in which he was a partner in order to

facilitate the funding of a buy$-$sell agreement. The

partnership paid him $$22,000$ for the policy and paid

premiums of $$4,000$ on the policy before Raymond died

during the current year. The partnership $($the

taxpayer$)$ received the face amount of $$100,000.$