Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting For Investments Equities Futures And Options Volume 1

Authors: R. Venkata Subramani

1st Edition

047082431X, 978-0470824313

More Books

Students also viewed these Accounting questions