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:

Nativist Theory

A perspective in developmental psychology that suggests humans are born with innate knowledge or abilities, particularly in aspects like language acquisition.

Interactionist Perspective

A theoretical viewpoint in sociology and social psychology stressing the importance of mutual and reciprocal influence between individuals and society.

Innate Capacity

Describes abilities or instincts that a person is born with, rather than skills developed through learning or experience.

Infant-Directed Speech

Uses shorter words and sentences, higher and more varied pitch, repetitions, a slower rate, and longer pauses; also known as motherese.