Mark,a Cash Basis Taxpayer,died on September 30,2014

question 90

Essay

Mark,a cash basis taxpayer,died on September 30,2014.His wife,Charlotte,provides you with the following information.
From January 1,2014 until his death,Mark received a salary of $35,000.Charlotte received a salary of $68,000 during 2014.Mark had earned commissions of $20,000 which Charlotte received after his death.Charlotte was the beneficiary of a $100,000 whole life policy purchased by Mark and a $50,000 group term life insurance policy purchased by Mark's employer.The employer had paid premiums of $250 on Mark's behalf.In addition,the corporation paid Charlotte a $10,000 employee death benefit in Mark's name.All employees' families received similar benefits regardless of financial need.Mark and Charlotte had itemized deductions of $15,600.They have no children but provide 100% support for Mark's widowed mother who lives with them and has no income.What is the amount of their taxable income on their 2014 tax return?

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Definitions:

Adhesion Contract

A standard-form contract prepared by one party, usually favoring that party, to which the other party has little negotiation power and often must accept as is.

Outward Manifestation

Outward manifestation refers to the external display or expression of a condition, intention, or agreement, observable by others.

Reasonable Amount

an amount or quantity that is considered fair, appropriate, or moderate under the circumstances.

Counteroffer

A response to an offer in a negotiation, where the original offer is rejected and a new offer is presented.