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Zack was the beneficiary of a life insurance policy on his wife. Zack had paid $20,000 in premiums on the policy. He collected $50,000 upon
Zack was the beneficiary of a life insurance policy on his wife. Zack had paid $20,000 in premiums on the policy. He collected $50,000 upon the death of his wife. He used the insurance proceeds to purchase a United States Government bond, which paid him $2,000 interest income during the year. Zack is not required to recognize any income from the above transactions
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