2011 REG

Wiley CPA Review QOTD – REG


Wiley CPA Software
 

The following is from the Wiley CPA 2011 Test Bank Software (Online). Click here to get over 1,100 REG CPA Exam practice questions for $87.

Topic: Individual Taxation

Seymour Thomas named his wife, Penelope, the beneficiary of a $100,000 (face amount) insurance policy on his life. The policy provided that upon his death, the proceeds would be paid to Penelope with interest over her present life expectancy, which was calculated at 25 years. Seymour died during 2010 and Penelope received a payment of $5,200 from the insurance company. What amount should she include in her gross income for 2010?

A: $ 200
B: $1,200
C: $4,200
D: $5,200

THE AUTHOR

Jeff Elliott

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COMMENTS

3 comments on “Wiley CPA Review QOTD – REG”

  • B (100,000/25 = 4,000. So out of proceeds of 5,200, $4,000 is life insurance proceed on face amount of policy, which is non taxable, and 1,200 is interest which ll be taxed).

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