The Annual Increase in the Cash Surrender Value of a Life

question 53

Multiple Choice

The annual increase in the cash surrender value of a life insurance policy:

• A)Is taxed according to the original issue discount rules.
• B)Is not included in gross income because the policy must be surrendered to receive the cash surrender value.
• C)Reduces the deduction for life insurance expense.
• D)Is exempt because it is life insurance proceeds.
• E)None of these.

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Definitions:

Rickettsiae

A genus of bacteria that are the causative agents of various diseases, including typhus and rickettsialpox, and are typically transmitted by lice, fleas, or ticks.

Mycobacteria

A genus of bacteria known for causing diseases like tuberculosis and leprosy in humans.

Wet Mount

A preparation of a specimen in a liquid that allows the organisms to remain alive and mobile while they are being identified.

Mordant

A substance, such as iodine, that can intensify or deepen the response a specimen has to a stain.