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Life insurance proceeds. Joe is the beneficiary of a life insurance policy taken out by his father several years ago. Joe%u2019s father died this year and Joe has the option of receiving $100,000 cash or electing to receive $14,000 per year for the remainder of his life. Joe is now 65. Joe%u2019s father paid $32,000 in premiums over the years.

a. How much must Joe include in gross income this year if he elects to accept the $100,000 face amount?

b. Assume Joe elects to receive the annual payments. what is his life expectancy?

c. What is his annual exclusion?

d. How much must he report as income each year?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9964587

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