sharon tranfers to Russ a life insurance policy with a cash surrender value of 27,000 and...

sharon tranfers to Russ a life insurance policy with a cash surrender value of 27,000 and a face value of 100,000 in exchange for real estate. Russ continues to buy the premiums of the until sharon dies. 7 years later. At that time, Russ has paid 12, 000 , and he collects the 100, 000 face value. How much of the prceeds, if any is taxable to Russ?

Expert Solution

	Taxable Proceeds	=	$ 61,000

	Computation of Taxable proceeds:
	Proceeds from the policy	=	$ 1,00,000
Less:	Policy Cash Value	=	$ 27,000
Less:	Premium paid by Russ	=	$ 12,000
	Taxable Proceeds	=	$ 61,000

ekkarill92 answered 3 years ago

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