Albert Had a Terminal Illness That Would Require Almost Constant

question 18

Multiple Choice

Albert had a terminal illness that would require almost constant nursing care for the remaining two years of his estimated life, according to his doctor.Albert had a life insurance policy with a face amount of $100,000.He had paid $25,000 of premiums on the policy.The insurance company has offered to pay him $80,000 to cancel the policy, although its cash surrender value was only $55,000.He accepted the $80,000.Albert used $15,000 to pay his medical expenses.Albert made a miraculous recovery and lived another 20 years.As a result of cashing in the policy:

• A)Albert must recognize $55,000 of gross income, but he has $15,000 of deductible medical expenses.
• B)Albert must recognize $65,000 ($80,000 - $15,000) of gross income.
• C)Albert must recognize $40,000 ($80,000 - $25,000 - $15,000) of gross income.
• D)Albert is not required to recognize any gross income because of his terminal illness.
• E)None of these.

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Definitions:

Federal Government

The federal government is the national level of government, having authority over all states within a nation, responsible for the execution and enforcement of laws and the administration of public policies.

Black Family

Refers to the family units and dynamics within African American communities, often highlighting cultural, social, and historical contexts.

Nineteenth-Century Idea

A concept, doctrine, or movement that gained prominence or was innovated in the 19th century, influencing various aspects of society, politics, economics, or culture during that period.

Gender Roles

Social and behavioral norms that are considered appropriate for individuals of a given sex within a specific culture or society, often influencing aspects of daily life and personal identity.