Mae Li Is Beneficiary of a $70,000 Insurance Policy on Her

question 105

Multiple Choice

Mae Li is beneficiary of a $70,000 insurance policy on her father's life.Upon his death,she elects to receive the proceeds in installments from the insurance company that carries the policy.She will receive $16,000 per year for five years.What are the tax consequences each year?

• A)All $16,000 each year is taxable.
• B)$10,000 interest is taxable in the first year.
• C)There is no taxable income.
• D)$2,000 of the $16,000 payment is taxable each year.

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Definitions:

Behaviorism

A branch of psychology that focuses on observable behaviors, emphasizing the role of environmental factors in shaping behavior.

John B.Watson

An influential American psychologist who is often considered a founder of behaviorism, focusing on observable behaviors rather than internal mental processes.

Population

A complete group of interest to researchers, from which a sample is drawn.

Sample

A subset of individuals or items selected from a larger population for the purpose of statistical analysis.