Carin, a Widow, Elected to Receive the Proceeds of a $150,000

question 45

Multiple Choice

Carin, a widow, elected to receive the proceeds of a $150,000 life insurance policy on the life of her deceased husband in 10 installments of $17,500 each.Her husband had paid premiums of $60,000 on the policy. In the first year, Carin collected $17,500 from the insurance company.She must include in gross income:

• A)$0.
• B)$2,500.
• C)$10,000.
• D)$25,000.
• E)None of the above.

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Definitions:

Attribution Theory

A psychological theory focused on how individuals interpret events and how this relates to their thinking and behavior.

Pretentious

Characterized by an attempt to seem more important or knowledgeable than one actually is, often by affecting greater importance or merit.

Preformed Schemas

Cognitive structures or frameworks that help individuals organize and interpret information, often based on past experiences and societal norms.

Stereotypes

Oversimplified standardized images or ideas held by individuals about members of a particular group.