Bart's Spouse, Carla, Dies During the Current Year

question 150

Multiple Choice

Bart's spouse, Carla, dies during the current year. Carla's life insurance policy names Bart the sole beneficiary of the $2 million proceeds. Bart invests the $2 million in a bank certificate of deposit (CD) . For the current year, Bart earns $98,000 interest from the CD. What are the tax effects of these events for Bart?
I.The $2 million is excluded from gross income.
II.Bart has no taxable income from these transactions.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Deviant Activities

Behaviors that violate societal norms or laws, ranging from minor infractions to serious crimes.

Causes and Costs

Causes and costs refer to the underlying reasons behind events or actions and the associated expenses or consequences that result from them.

Ambiguity in Laws

Situations where laws are unclear, open to multiple interpretations, or vague, leading to legal uncertainties and challenges.

Greater Corruption

Enhanced levels of dishonest or fraudulent conduct by those in power, typically involving bribery or embezzlement.