Sixteen years ago, Ms Cole purchased a $574,000 insurance policy on her own life and named her son as sole beneficiary She has paid $35,588 total premiums to keep this policy in force This year, she liquidates the policy for its $44,198 cash surrender value Does she recognize income on the liquidation Now assume that Ms Cole is terminally ill The insurance policy provides that a person with a life expectancy of less than one year can liquidate the policy and receive 80 percent of the death benefit She does so and receives a $459,200 accelerated death benefit Does she recognize income on the liquidation Required A Required B This year, she liquidates the policy for its $44,198 cash surrender value Does she recognize income on the liquidation Does she recognize income on the liquidation Recognized Income Required A Required B Required A Required B Now assume that Ms Cole is terminally ill The insurance policy provides that a person with a life expectancy of less than one year can liquidate the policy and receive 80 percent of the death benefit She does so and receives a $459,200 accelerated death benefit Does she recognize income on the liquidation Does she recognize income on the liquidation Recognized Income

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Posted on Jul 15, 2024

Sixteen years ago, Ms. Cole purchased a $574,000 insurance policy on her own life and named her son as sole beneficiary. She has paid $35,588

Sixteen years ago, Ms. Cole purchased a $574,000 insurance policy on her own life and named her son as sole beneficiary. She has paid $35,588 total premiums to keep this policy in force.

This year, she liquidates the policy for its $44,198 cash surrender value. Does she recognize income on the liquidation?
Now assume that Ms. Cole is terminally ill. The insurance policy provides that a person with a life expectancy of less than one year can liquidate the policy and receive 80 percent of the death benefit. She does so and receives a $459,200 accelerated death benefit. Does she recognize income on the liquidation?

Required A Required B This year, she liquidates the policy for its $44,198 cash surrender value. Does she recognize income on the liquidation? Does she recognize income on the liquidation? Recognized Income Required A Required B > Required A Required B Now assume that Ms. Cole is terminally ill. The insurance policy provides that a person with a life expectancy of less than one year can liquidate the policy and receive 80 percent of the death benefit. She does so and receives a $459,200 accelerated death benefit. Does she recognize income on the liquidation? Does she recognize income on the liquidation? Recognized Income