Albert Had a Terminal Illness Which Required Almost Constant Nursing

question 56

Multiple Choice

Albert had a terminal illness which required 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.Albert had paid $10,000 of premiums on the policy.The insurance company has offered to pay him $75,000 to cancel the policy, although its cash surrender value was only $60,000.Albert accepted the $75,000.Albert used $5,000 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 is not required to recognize any gross income because of his terminal illness.
• B)Albert must recognize $65,000 ($75,000 - $10,000) of gross income.
• C)Albert must recognize $10,000 ($75,000 - $60,000 - $5,000) of gross income.
• D)Albert must recognize $75,000 of gross income, but he has $5,000 of deductible medical expenses.
• E)None of the above.

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Definitions:

Authority

signifies the legitimate power or right given to an individual or body to make decisions, command resources, and enforce obedience.

Performing Stage

A phase in group development where members effectively work together and achieve high levels of task performance and cooperation.

Bruce Tuckman

An American psychological researcher known for his "forming, storming, norming, performing" model of group development.

Group Development

The sequence of stages groups undergo from formation to termination, including forming, storming, norming, and performing.