Leland pays premiums of $5,000 for an insurance policy in the face amount of $25,000 upon...

Leland pays premiums of $5,000 for an insurance policy in the face amount of $25,000 upon the life of Caleb and subsequently transfers the policy to Tyler for $7,500. Over the years, Tyler pays subsequent premiums of $1,500 on the policy. Upon Caleb's death, Tyler receives the proceeds of $25,000.

As a result, she is required to include $ in her gross income.

Expert Solution

Answer:

Given that:

Leland pays premiums of $5,000 for an insurance policy in the face amount of $25,000 upon the life of Caleb and subsequently transfers the policy to Tyler for $7,500. Over the years, Tyler pays subsequent premiums of $1,500 on the policy

Amount required to include in her gross income = $25,000 - $7,500 - $1,500

= $25,000 - $9000

= $16,000

As a result, she is required to include $16,000 in her gross income

ekkarill92 answered 2 years ago

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