At Her Death Tricia Owned a Life Insurance Policy on Her

question 80

Multiple Choice

At her death Tricia owned a life insurance policy on her life that paid her daughter $500,000 upon her death. The policy was only valued at $25,000 prior to Tricia's death. What amount, if any, is included in Tricia's gross estate?

• A)$500,000.
• B)$25,000.
• C)$25,000 if Tricia transferred ownership of the policy within three years of her date of death.
• D)zero-life insurance proceeds due to the death of the decedent are not included in the decedent's gross estate.
• E)zero if Tricia's daughter refused to accept the proceeds.

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Definitions:

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Accounts Payable Turnover

A financial ratio that measures the rate at which a company pays off its suppliers by comparing total purchases to average accounts payable.

Inventory Sold

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Factored Receivables Financing

A financial transaction where a business sells its accounts receivable to a third party at a discount in exchange for immediate cash.