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Katie, a Self- Employed CPA, Purchased an Accident & Disability

question 497

True/False

Katie, a self- employed CPA, purchased an accident & disability insurance policy. As the result of an auto accident, Katie was unable to work and received $3,000 of disability benefits per month for seven months. The benefits were based on her estimated monthly income and should be reported as gross income.


Definitions:

No Formal Agreement

A situation where parties engage in a transaction or activity without a legally binding contract.

Business for Profit

An organization or enterprise engaged in commercial, industrial, or professional activities with the aim of generating financial gain.

Tax Liability

The total amount of tax that an individual or organization is legally obligated to pay to a taxing authority.

Capital Contribution

The money or other assets given to a company by its owners or shareholders to support its operations and growth.

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