Proceeds out of the insureds gross estate

Assignment Help Financial Management
Reference no: EM13930180

It is often desirable to keep life insurance death proceeds out of the insured’s estate for tax reasons. Which of the following describe(s) a necessary condition for keeping the proceeds out of the insured’s gross estate?

I       The insured must surrender all incidents of ownership.

II      The transfer of incidents of ownership must occur more than three years prior to death.

III     The insured cannot continue to pay premiums on the policy.

I only

II only

I and II only

I, II and III

Reference no: EM13930180

Questions Cloud

Difficult understanding and answering these problems : Difficult understanding and answering these problems.
Share to make the two offers equally attractive : A business executive is offered a management job at Generous Electrical Company. They offer to give him a five-year contract which calls for a salary of $62,000 per year, plus 600 shares of their stock at the end of the five years. what must the Gene..
Identify the event depicted in each journal entry : Identify the event depicted in each journal entry as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE).
What are some of the advantages of using a meta-analysis : What are some of the advantages of using a meta-analysis? Provide an example
Proceeds out of the insureds gross estate : It is often desirable to keep life insurance death proceeds out of the insured’s estate for tax reasons. Which of the following describe(s) a necessary condition for keeping the proceeds out of the insured’s gross estate?
List all the employees in the emp table : Change your answer from above to list those employees with the bottom 4 credit limits.
Concerning valuation of life insurance policies-federal tax : Which of the following statements concerning the valuation of life insurance policies for federal gift tax purposes is (are) correct?
Concerning use of funded irrevocable life insurance trust : All the following statements concerning the use of a funded irrevocable life insurance trust are correct EXCEPT:
Policys gift tax value-determined by government rules : Some years ago, Y purchased a $100,000 universal life policy on his own life. Two years ago, he sold the policy to his cousin for the policy’s gift tax value of $40,000 as determined by government rules.

Reviews

Write a Review

 

Financial Management Questions & Answers

  What amount will the following investment accumulate

To what amount will the following investment accumulate? $26,580, invested today for 3 years at 18.77 percent, compounded monthly.

  Brokerage account-time to reach financial goal

You have $60,701.28 in a brokerage account, and you plan to deposit an additional $3,000 at the end of every future year until your account totals $250,000. You expect to earn 11% annually on the account. How many years will it take to reach your goa..

  Calculate the cost pf common equity using gordon model

Last year black water inc paid dividends $2.58. Companys dividends are expected to grow at an annual rate of 2.88 percent, forever. The companys common stock is currently selling in the market for $98.95.The investment banker will charge floatation c..

  Calculate your portfolios new beta

Your retirement fund consists of a $7,500 investment in each of 20 different common stocks. The portfolio's beta is 2.15. Now, suppose you sell one of the stocks with a beta of 1.0 for $7,500 and use the proceeds to buy another stock whose beta is 1...

  About the huge cash reserves the companies accumulate

Shareholders of some companies occasionally complain about the huge cash reserves the companies accumulate. And, sometimes (Wal-Mart in 2007, Apple in 2013) firms indeed satisfy investor concerns and announce plans to distribute substantial portions ..

  Risk return theory states that the higher the risk

Risk return theory states that the higher the risk, the higher the required return. The present value of $50,000 to be received 10 years from now at 8% interest is about $23,160. The current share price is $25, most recent dividend is $1.25, so divid..

  Bonds make semi annual payments-common stock

Given the following information for Bellevue Power Co, find the WACC. Assume the company's tax rate is 35 percent. Debt: 5,000. 7% coupon bonds outstanding, $ 1000 par value, 20 years to maturity, selling for 92 percent of par; bonds make semi annual..

  Suppose that the treasurer of ibm has an extra cash reserve

Suppose that the treasurer of IBM has an extra cash reserve of $ 100,000,000 to invest for six months. The six- month interest rate is 6 percent per annum in the United States and 5 percent per annum in France.

  Calculating the depreciable basis for real property

Which of the following is NOT included when calculating the depreciable basis for real property?

  Bond valuation-what is the bonds price

Nungesser Corporation's outstanding bonds have a $1,000 par value, a 8% semiannual coupon, 9 years to maturity, and an 7.5% YTM. What is the bond's price?

  Balance sheet equity-what is the target stock price

Fly Away, Inc., has balance sheet equity of $5.7 million. At the same time, the income statement shows net income of $843,600. The company paid dividends of $459,762 and has 120,000 shares of stock outstanding. If the benchmark PE ratio is 21, what i..

  Benefits described by the firm or local government officials

Local communities, states, and even countries often compete to get large firms to locate in their area. Using the internet or other resources, describe at least one example of a major firm located in a new city, state, or country and list the benefit..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd