life insurance proceeds paid to a beneficiary because of the insured's death is taxable. true or false
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- TRUE OR FALSE If the insured outlived the life insurance policy, the proceeds shall be taxable to the beneficiary less the total amount of premiums paid to the insurerIdentify which is taxable? A. Proceeds of life insurance received by heirs B. Excess amount received over premiums paid by insured upon surrender of policy C. Compensation for personal injuries of an employee D. Indemnification for moral damagesThe following are excluded from gross income, except: a. Proceeds of life insurance policy received by the beneficiary upon death of insured b. Compensation for injuries, sickness, or death c. Amount received by the insured in excess of the premiums paid d. None of the above
- Which of the following life insurance proceeds is not included in the gross estate of the deceased? A. Insurance proceeds with SSS.B. Insurance proceeds where the beneficiary is a third person revocably appointed.C. Insurance proceeds under a group insurance taken out by the employee for himself as beneficiary.D. Insurance proceeds covering the life of the insured decedent where the estate of the deceased, hisexecutor or administrator is the beneficiary whether or not the insured retained the power of revocation.Define each of the given and describe the different EXCLUSIONS FROM GROSS INCOME: Proceeds of life insurance policy Amount received by the insured as a return of premium Gift, bequest, or descent Compensation for injuries or sickness Income exempt under treaty Retirement benefits, pensions, gratuities, etc.The proceeds received under a life insurance endowment contract is not considered part of gross income if the price for the endowment policy was not fully paid where payment is made as a result of the death of the insured if it is so stated in the life insurance endowment policy where the beneficiary was not the one who took out the endowment contract
- Life insurance premiums shall be reported as a deductible expense for financial reporting purposes if the company paying it is the beneficiary. Required: True or FalseIf insurance proceeds are paid out to the beneficiaries, and the IRS later becomes aware that the benefits were subject to the estate tax: Select one: a. the IRS can follow (and attempt to collect) the life insurance proceeds as far as it can trace them b. the IRS may only collect the amount owed from the executor of the estate. c. the IRS may only collect the amount owed from the executor of the estate and any beneficiaries who received payment. d. the insurer may be liable for the tax owed.Which of the following income is taxable? * A. Proceeds of life insurance policy paid to the heirs or beneficiaries upon the death of the insured. B. Employment gratuities in exchange for services rendered by employees. C. Retirement benefit under RA 7641 D. Gains from the sale of bonds with maturity of more than 5 years
- Under a deferred annuity owned by a nongrantor trust, how does the annuity's death benefit operate?(Search Chapter 6) a. The death of the trust grantor triggers payout of the contract's death benefit and termination of the contract. b. The death of the primary annuitant triggers payout of the contract's death benefit and termination of the contract. c. The death of the trust beneficiary triggers payout of the contract's death benefit and termination of the contract. d. Annuities owned by a trust can continue in perpetuity; since trusts do not die, there is no death benefit payable from an annuity owned by a trust.Statement 1: If an insured outlived his policy and received from the insurance company an amount equivalent to the total premiums paid, such amount is taxable. Statement 2: If the insured dies and the beneficiary receives payment from the insurance company, the amount received in excess of the total premiums paid shall be taxable. A. Both statements are true B. Both statements are false C. Only statement 1 is true D. Only statement 2 is trueWhen a life insurance policy lapses, it: a. benefits the insured b. benefits neither the insurer nor the insured. c. benefits the insurer d. benefits both the insurer and the insured