Question
Ira Munro owns a life insurance policy that will pay $750,000 to his granddaughter Ginnie upon Iras death. To date, Ira has paid $69,200 total
Ira Munro owns a life insurance policy that will pay $750,000 to his granddaughter Ginnie upon Iras death. To date, Ira has paid $69,200 total premiums on the policy, which has a current cash surrender value of $82,500.
A) Assume that Ira dies and Ginnie receives a $750,000 payment from the insurance company. How much of the payment does Ginnie include in her gross income?
B) Assume that Ira liquidates the policy for its cash surrender value and receives an $82,500 payment from the insurance company. How much of the payment does Ira include in his gross income?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started