a. What amount should Ray include in his gross income from receiving the life insurance proceeds? b. The insurance company paid Ray $16,000 interest on the life insurance proceeds during the period Carin's estate was in administration. During this period, Ray had left the insurance proceeds with the insurance company. Is this interest taxable? c. When Ray paid $800,000 for Carin's partnership interest, priced as specified in the agreement, the fair market value of Carin's interest was $1,000,000. Indicate whether the following statements are "True" or "False" regarding how much, if any, Ray would include in his gross income from this bargain purchase. Since Ray did not recognize a gain on the purchase, Ray would include nothing from the transaction in his gross income. Ray would include the difference between the purchase price and what he paid in his gross income.
a. What amount should Ray include in his gross income from receiving the life insurance proceeds? b. The insurance company paid Ray $16,000 interest on the life insurance proceeds during the period Carin's estate was in administration. During this period, Ray had left the insurance proceeds with the insurance company. Is this interest taxable? c. When Ray paid $800,000 for Carin's partnership interest, priced as specified in the agreement, the fair market value of Carin's interest was $1,000,000. Indicate whether the following statements are "True" or "False" regarding how much, if any, Ray would include in his gross income from this bargain purchase. Since Ray did not recognize a gain on the purchase, Ray would include nothing from the transaction in his gross income. Ray would include the difference between the purchase price and what he paid in his gross income.
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 32P
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT