Which of the following statements is not correct?Proceeds of life insurance policies paid to beneficiaries upon the death of the insured are excluded from gross income regardless of whether the proceeds are received as a single sumor in installments.In case of transfer for a valuable consideration by assignment or otherwise of a life insurance, endowment or annuity contract or any interest therein, only the actual value of suchconsideration and the amount of the premium and the sums subsequently paid by the transferee are exempt from income tax.O Marriage fees, baptismal offerings, sums paid for saying masses for the dead and other contributions received by a clergyman. evangelist or religious worker for services rendered aretaxable income.O Monetization of leave credits of employees who were unable to go on leave due to exigencies of the service constitutes taxable income.

Leave monetization is actually the leave encashment which means the if there is any earned leaves…

Answered: Which of the following statements is…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter2: Gross Income And Exclusions

Section: Chapter Questions

Problem 15MCQ

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Similar questions

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 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
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 insurer
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
Identify 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 damages
life insurance proceeds paid to a beneficiary because of the insured's death is taxable. true or false
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.
If 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 best describes the accounting for discounts and premiums for bonds purchased by a fiduciary for an estate? a. Premiums are amortized, but discounts are not. b. Discounts are amortized, but premiums are not. c. GAAP guidelines for amortization are followed, i.e., both are amortized. d. Like bonds purchased prior to the death, neither discounts nor premiums are amortized.
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.
Amount receivable by the estate of the deceased, his executor or administrator as a beneficiary under policy taken by the decedent upon his own life is: * excluded from gross income. part of gross income whether the beneficiary is revocable or irrevocable. part of gross income if the beneficiary is irrevocable. none of the above
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 true

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