David Has Been Diagnosed with Cancer and Is Expected to Live

question 51

Multiple Choice

David has been diagnosed with cancer and is expected to live less than 18 months.David is covered by a life insurance policy with a $400,000 face amount.David cashes in the policy early under a special option and receives 80% of the face amount or $320,000.In the year of collection,David will report

• A)no income.
• B)$80,000.
• C)$320,000.
• D)$400,000.

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Definitions:

Devaluation of Credentials

The diminishing value of educational or professional qualifications due to oversupply or changes in job market demand.

Canadian Doctor

A medical professional licensed to practice medicine within Canada, often involved in providing healthcare and treatment to patients.

Ethnic Affiliation

A sense of connection or belonging to a group that shares common cultural, linguistic, or ancestral traits.

Holocaust

The mass murder of six million Jews and millions of others by the Nazi regime and its collaborators during World War II.