The Ande Case found on: https://www.chegg.com/homework-help/questions-and-answers/case-2-ande-case-tax-planning-mini-case-today-s-date-july-1-larry-lolita-ande-age-44-revie-q35083999

1. Which of the following statements is true?

I. If Larry were to pass away this year, Lolita would be required to claim the face value of the life insurance received for federal income tax purposes.

II. If Larry uses a transit pass valued at $100 per month given to him by his employer to commute to and from work he will be required to add the value of the pass to his income for tax purposes.

III. If the Andes want to reduce gross income for tax purposes, they could contribute to a flexible spending plan to cover the cost of unreimbursed medical expenses.

IV. Although the face value of the life insurance policy will be tax free to Lolita if Larry were to pass away, the cash value will be fully taxable as income at the federal level.

a. II only

b. III only

c. I and III only

d. II and IV only

e. II, III, and IV only

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7. Which of the following tax planning strategies provides the greatest immediate tax benefit for the Andes? a. Contributing the maximum allowable to a Roth IRA. b. Making the maximum allowable deductible contribution to a Traditional IRA. c. Establishing and contributing to an immediate fixed annuity. d. Purchasing additional whole life insurance