Rebecca Is the Beneficiary of a $500,000 Insurance Policy on Her

question 23

Multiple Choice

Rebecca is the beneficiary of a $500,000 insurance policy on her husband's life.She elects to receive $52,000 per year for 10 years rather than receive the entire amount in a lump sum.Of the amount received each year

• A)$2,000 is taxable income.
• B)$50,000 is taxable income.
• C)$52,000 is taxable income.
• D)$5,000 per year is tax free as a death benefit.

---

Definitions:

Capital Contribution

The act of providing capital, either in the form of money or other assets, to a company or partnership by its owners or partners.

General Partner

An owner of a partnership who has unlimited liability and is typically involved in the day-to-day management of the business.

Trust Funds

Financial funds legally held by a trustee for the benefit of another party, known as the beneficiary.

Patent Leather

Patent Leather is a type of leather that has been finished with a high gloss, achieved through a coating process, often used in fashion items such as shoes, belts, and handbags.