Ashley collected $150,000 on her deceased husband's life insurance policy. She elected to collect the policy in 10 equal annual payments of $18,000 each OA) None of the payments must be included in Ashley's gross income O B) The amount she receives in the first year is a nontaxable return of capital OC) For each $18,000 payment that Iris receives, she will include the entire amount as taxable income. OD) For each $18,000 payment that Iris receives, she can exclude $15,000 ($150,000/$180,000 $18,000) from gross income.
Ashley collected $150,000 on her deceased husband's life insurance policy. She elected to collect the policy in 10 equal annual payments of $18,000 each OA) None of the payments must be included in Ashley's gross income O B) The amount she receives in the first year is a nontaxable return of capital OC) For each $18,000 payment that Iris receives, she will include the entire amount as taxable income. OD) For each $18,000 payment that Iris receives, she can exclude $15,000 ($150,000/$180,000 $18,000) from gross income.
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 24CE
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Transcribed Image Text:Ashley collected $150,000 on her deceased husband's Mo insurance policy. She elected to collect the policy in 10 equal annual payments of $18,000 each
A) None of the payments must be included in Ashley's gross income
OB) The amount she receives in the first year is a nontaxable return of capital
OC) For each $18,000 payment that Iris receives, she will include the entire amount as taxable income.
OD) For each $18,000 payment that Ins receives, she can exclude $15,000 ($150,000/$180,000 $18,000) from gross income.
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