11 of 20Delilah Bundy is the policyowner-insured of a $300,000 whole life insurance policy that contains a typical misstatement ofage provision. The insurer discovered that Ms. Bundy stated she was age 40 in the application for insurance, whenactually she was only age 35 at the time of application. Ms. Bundy is still alive. In this situation, the insurer most likely willOvoid the policy on the basis of the misstatement of Ms. Bundy's agecharge Ms. Bundy an additional premium amountrefund Ms. Bundy, the difference in the premium amount caused by the misstatementincrease the policy's face amount to the amount that the premiums paid would have purchased for a femalePrevious Question

Step 1: Here's why: (i). Misstatement of Age Provision: Most whole life insurance policies have a…

Answered: 11 of 20 Delilah Bundy is the…

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter5: Gross Income: Exclusions

Section: Chapter Questions

Problem 23CE

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Fifteen years ago Sam, a life insurance agent, sold his good friend Tanya a twenty year term life insurance policy in which she was both the policy holder and the life insured. Tanya designated her best friend Julia as beneficiary. Tanya died, and the insurance company received notice of her death from her executor. Given this scenario, what was the next step in this process? Select onet a. Julia had to contact the insurer to requesta claim form b. Sam contacted the insurer to request the notice of death c. The insurer contacted Sam to help Julia complete the claim form d. The insurer notified Julia so that she could complete the claim form
LO.2 Alfred owned a term life insurance policy at the time he was diagnosed with a terminal illness. After paying $18,300 in premiums, he sold the policy to a company that is authorized by the state of South Carolina to purchase such policies. The company paid Alfred $125,000. When Alfred died 18 months later, the company collected the face amount of the policy, $150,000. As a result of the sale of the policy, how much is Alfred required to include in his gross income?
V4. When Betty was diagnosed as having a terminal illness, she sold her life insurance policy to Insurance Purchase, Inc., a company that is licensed to invest in these types of contracts. Betty sold the policy for $32,000, and Insurance Purchase, Inc. became the beneficiary. She had paid total premiums of $19,000. Betty died eight months after the sale. Insurance Purchase, Inc., collected $50,000 on the policy. The company had paid additional premiums of $4,000 on the policy. Betty's estate is not required to recognize a $13,000 gain from the sale of her life insurance policy; and Insurance Purchase, Inc. is required to recognize a $14,000 gain from the insurance policy. True or False. Please explain
Amando took out a life insurance policy for P1,000,000.00 naming his wife as beneficiary. Under the terms of the policy, the insurer will pay Amando the amount of P1,000,000.00 after the 2Oth year of the policy, or his beneficiary, should he die before that date. Amando outlived the policy and received P1,000,000.0O. The premiums paid on the policy was P250,000.00. How much is the taxable income? * P1,000,000 P750,000 O P250,000 Zero
After paying premiums for 24 years, Chad forgot to pay his 25th year annual premium due on January 1. He died 3 months later. Will the insurer pay? Circle one: Yes (go to part b) No (go to part c) If yes, cite the relevant provision and explain why. If no, cite the relevant provision and explain why not.
LO.2 During 2019, Susan incurred and paid the following expenses for Beth (her daughter), Ed (her father), and herself: Beth qualifies as Susans dependent, and Ed would also qualify except that he receives 7,400 of taxable retirement benefits from his former employer. Beths psychiatrist recommended Red River Academy because of its small classes and specialized psychiatric treatment program that is needed to treat Beths illness. Ed, who is a paraplegic and diabetic, entered Heartland in October. Heartland offers the type of care that he requires. Upon the recommendation of a physician, Susan has an air filtration system installed in her personal residence. She suffers from severe allergies. In connection with this equipment, Susan incurs and pays the following amounts during the year: The system has an estimated useful life of 10 years. The appraisal was to determine the value of Susans residence with and without the system. The appraisal states that the system increased the value of Susans residence by 2,200. Ignoring the AGI floor, what is the total of Susans expenses that qualifies for the medical expense deduction?
Yousif has purchased insurance for his home with four different companies, Company A covers 4,706, Company B covers 3,818, Company C covers 4,587 and Company d covers 3,121. Assuming the insurers follow a pro rata liability method, how much will company B pay if a loss of 7.554 occurs?
Becky Fenton has 75/150/85 automobile insurance coverage. If two other people are awarded $120,000 each for injuries in an auto accident in which Becky was judged at fault, how much of this judgment would the insurance cover? Insurance payment
39. Annie is covered by a $200,000 group-term life insurance policy of which her daughter is the sole beneficiary. Annie's employer pays the entire premium for the policy, for which the uniform premium table factor is $0.75 per $1,000 per month of coverage. How much, if any, of the cost of the group-term life insurance is included in Annie's gross income on an annual basis? a. $0. b. $450. c. $1,350. d. $1,800.
Glenda is 71 years old and lives in a retirement home. She paid a total of $9,000 in attendant care fees, which she decided to claim as a medical expense. Form T2201 is certified by the CRA. How much can Glenda claim on Line 31600? gha $0 $130 $8,870 $9,000
Cardo, a GSIS employee, died in a car accident. His heirs collected the following proceed of life insurance policies:AXA Life, revocable, designated to his wife Alyana - 500,000Sunlife, irrevocable, designated to his son - 700,000AON life insurance, revocable, designated to his estate - 300,000PhilAm Life, irrevocable, designated to his administrator - 400,000Accident Insurance – 500,0000GSIS benefits - 150,0001.Determine the Gross Estate of Mr. Yap: ________________2.What are the non-taxable proceed of life insurance?
Gussie Fring has 100/300/50 automobile insurance coverage, and was involved in a very serious accident. One person sustained $200,000 in medical claims, and two other people are awarded a total of $135,000 each for injuries in an auto accident in which Gussie was judged at fault. How much, if any, of this judgment would the insurance not cover?

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