If the Employer Provides All Employees with Group Term Life

question 9

True/False

If the employer provides all employees with group term life insurance equal to twice the employee's annual salary,an employee with a salary of $40,000 has no gross income from the life insurance protection provided by the employer.

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Definitions:

Preferred Stock

A class of stock that carries with it the right to receive payment of dividends and/or the distribution of assets on the dissolution of the corporation before other classes of stock receive their payments.

Dividends

Net profits, or surplus, set aside for shareholders.

Dissolution

A change in the relation of partners caused by any partner ceasing to be associated in the carrying on of the business.

Limited Liability Company

A business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.