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Richard purchased a $150,000 life insurance policy on his mothers life and designated himself as the beneficiary. He later sold the policy to his friend,
Richard purchased a $150,000 life insurance policy on his mothers life and designated himself as the beneficiary. He later sold the policy to his friend, Penelope, for $30,000. Penelope paid $50,000 in premiums. Upon the death of Richards mother, what amount must Penelope include in gross income?
a.30000
b.70000
c.50000
d.90000
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