User Account

All Pages

What amount of the annual payments can he exclude

Assignment Help Accounting Basics
Reference no: EM132017854

Question - Jack is the beneficiary of a life insurance policy taken out by his father several years ago. Jack's father passed away, and Jack has the option to receive the $100,000 face value of the policy in cash or to receive annual payments of $1,000 per month for the rest of his life. Jack is now 65, and his father paid $32,000 in premiums over the years. How much must Jack include in gross income this year if he takes the $100,000 face amount of the policy this year? Assume that Jack elects to take the annual payments and that his life expectancy is 20 years, what amount of the annual payments, if any, can he exclude from gross income? How much must he include in gross income, if any? Explain.

Reference no: EM132017854

Questions Cloud

Net present value and profitability index : What is the relationship between Net Present Value (NPV) and Profitability Index (PI)?
Compute the accounting break-even point : Newcombe & Associates, Inc. is considering the introduction of a new product. Production of the new product requires an investment of $140,000 in equipment.
Scenario analysis and sensitivity analysis : What is the difference between scenario analysis and sensitivity analysis?
What is the expected capital gains yield : The next dividend payment by Dizzle, inc will be $2.48 per share. The dividends are anticipated to maintain a growth rate of 4.5 percent forever.
What amount of the annual payments can he exclude : Assume that Jack elects to take the annual payments and that his life expectancy is 20 years, what amount of the annual payments, if any, can he exclude
What is the total amount of interest paid on this loan : What is the total amount of interest paid on this loan?
What is total amount of interest paid over life of loan : Construct a loan amortization schedule for a 15 year, 7.75% loan of $10,000,000. What is the total amount of interest paid over the life of the loan?
Find npv of the project if shadow price of capital is given : A new regulatory policy will have an immediate cost of $75 million, and will create costs of $15 million at the end of each of the next two years.
Calculate the maximum free space loss experienced : Calculate the maximum free space loss experienced by the signals sent from sensors. (Assume control centre is located exactly at the centre of the landscape)

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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