Leland pays premiums of $34,750 for an insurance policy in the face amount of $173,750 upon...

Leland pays premiums of $34,750 for an insurance policy in the face amount of $173,750 upon the life of Caleb and subsequently transfers the policy to Tyler for $52,125. Over the years, Tyler pays subsequent premiums of $10,425 on the policy. Upon Caleb’s death, Tyler receives the proceeds of $173,750. As a result, she is required to include $________ in her gross income.

Expert Solution

Amount required to include in her gross income = $173,750 - $52,125 - $10,425

Amount required to include in her gross income = $111,200

As a result, she is required to include $111,200 in her gross income.

ekkarill92 answered 2 years ago

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