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:

Emotionality

The quality or state of being emotional; the ability to express or handle emotional responses.

Instrumentality

An orientation toward action and accomplishment.

Gender Similarities Hypothesis

The theory that males and females are similar on most, but not all, psychological variables, challenging the idea of vast gender differences in cognitive abilities and behaviors.

Optimistic

Having a hopeful or positive outlook on the future, expecting the best possible outcome.