Lily took a life insurance from Sierra Insurance Company, with her husband Sixx as the beneficiary. Under the policy, Sierra will pay Lily the amount of P500,000 when the policy matures, or to her beneficiary husband in case she dies before the maturity. Lily will pay P10,000 annully for 20 years. Assuming that the policy matured when Lily reached 50 years old and she received the entire amount of P500,000 from the insurer, how much income should she report? 0 200,000 300,000 500,000

Lily took a life insurance from Sierra Insurance Company, with her husband Sixx as the beneficiary. Under the policy, Sierra will pay Lily the amount of P500,000 when the policy matures, or to her beneficiary husband in case she dies before the maturity. Lily will pay P10,000 annully for 20 years. Assuming that the policy matured when Lily reached 50 years old and she received the entire amount of P500,000 from the insurer, how much income should she report? 0 200,000 300,000 500,000

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter5: Gross Income: Exclusions

Section: Chapter Questions

Problem 22CE: Ellie purchases an insurance policy on her life and names her brother, Jason, as the beneficiary....

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Ellie purchases an insurance policy on her life and names her brother, Jason, as the beneficiary. Ellie pays 32,000 in premiums for the policy during her life. When she dies, Jason collects the insurance proceeds of 500,000. As a result, how much gross income does Jason report?
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
34. Two years ago, your client, Tim, purchased a $100,000 whole life insurance policy on the life of his wife. He has made all of the premium payments from his separate checking account. The beneficiary of the policy is their only child. If Tim dies within the next few months, what is the value of the policy that will be included in his gross estate? A) The cash surrender value of the policy because he will have purchased the policy within three years of his death B) The full death benefit value of the policy because the proceeds are paid to a family member C) The face value of the policy because he paid the premiums from his separate checking account D) The replacement value of the policy because he will have an incident of ownership at death
Ms. Asma is aged 40 years. She consulted Oman United Insurance Company to plan for the higher education of her daughter. Therefore, she asked for a straight life policy with a face value of OMR 80,000 with a semi-annually payment basis. How much will Ms. Asma reimbursed Oman United Insurance Company? 10-Year Fixed Rate 20-Year Fixed Rate Straight-Life Age Male Female Male Female Male Female 20 1.21 1.17 1.82 1.76 2.72 2.63 30 1.27 1.23 1.91 1.85 3.49 3.38 40 1.46 1.41 2.20 2.13 4.02 3.88 50 2.41 2.33 3.63 3.51 5.18 5.01 60 4.72 4.56 7.11 6.88 8.21 7.93 O a. OMR 158.304 b. OMR 80.704 C. OMR 27.160 d. OMR 310.4
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2.Colin is 35 years old and inherits an IRA from his mother, who dies prematurely at age 60. Which of the following statements is correct regarding his options for the inherited IRA? Colin does not have to take distributions until his mother would have been 70 years old. Colin can rollover the IRA into his own IRA. Colin can take out the entire distribution within ten years and avoid all penalties. Colin must take distributions over his single life expectancy.
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Wendy has been a member of an occupational final salary defined benefit pension scheme for 20 years. She is currently 45 years old and plans to retire when she is 65. Her expected final year’s salary is £30,000. The pension scheme operates on the basis of 1/80 of salary per year of membership of the pension scheme. What can she expect to receive as her pension per annum?
Bobbi opens an IRA account in which she deposits $3,000 per year until she retires in 50 years. If Bobbi earns 12% per year on that account, how much will she have accumulated at the end of the 50 years?
Julie has just retired. Her company’s retirement program has two options as to how retirement benefits can be received. Under the first option, Julie would receive a lump sum of $138,000 immediately as her full retirement benefit. Under the second option, she would receive $25,000 each year for 6 years plus a lump-sum payment of $57,000 at the end of the 6-year period. Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using tables. Required: 1-a. Calculate the present value for the following assuming that the money can be invested at 12%. 1-b. If she can invest money at 12%, which option would you recommend that she accept?
Julie has just retired. Her company’s retirement program has two options as to how retirement benefits canbe received. Under the first option, Julie would receive a lump sum of $150,000 immediately as her fullretirement benefit. Under the second option, she would receive $14,000 each year for 20 years plus a lumpsum payment of $60,000 at the end of the 20-year period.Required:If she can invest money at 12%, which option would you recommend that she accept? Use present valueanalysis.