Glen carries a $125.000 insurance policy on his ife. Premiums paid over the years total S6.000. Dividends on the policy have totaled $4,000. Glen has left the dividends on the policy with the insurance company. During the cumrent year, the insurance company credited $1.500 of interest on the accumulated dividends to Glen's account Requirements a. How much income is Glen obligated to report in connection with the policy? b. Would it make any difference if the accumulated dividends equaled 58.000 inatead of 54.0007 Requirement a. How much income is Gien obligated to report in connection with the policy? Glen would report only the interest of $1.500 as taxable income Requirement b. Would it make any diference if the acoumulated dvidends equaled 58.000 instead of $4,0007 - The total tarable amount is Glen would be taxed on rates avalabie to recipients of corporate dividend distributions. The amount for the lower tax
Glen carries a $125.000 insurance policy on his ife. Premiums paid over the years total S6.000. Dividends on the policy have totaled $4,000. Glen has left the dividends on the policy with the insurance company. During the cumrent year, the insurance company credited $1.500 of interest on the accumulated dividends to Glen's account Requirements a. How much income is Glen obligated to report in connection with the policy? b. Would it make any difference if the accumulated dividends equaled 58.000 inatead of 54.0007 Requirement a. How much income is Gien obligated to report in connection with the policy? Glen would report only the interest of $1.500 as taxable income Requirement b. Would it make any diference if the acoumulated dvidends equaled 58.000 instead of $4,0007 - The total tarable amount is Glen would be taxed on rates avalabie to recipients of corporate dividend distributions. The amount for the lower tax
Chapter4: Gross Income: Concepts And Inclusions
Section: Chapter Questions
Problem 60CP
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Transcribed Image Text:Glen carries a $125,000 insurance policy on his life. Premiums paid over the years total $6.000. Dividends on the policy have totaled $4,000. Glen has left the
dividends on the policy with the insurance company. During the curent year, the insurance company credited $1,500 of interest on the accumulated dividends to
Glen's account.
Requirements
a. How much income is Glen obligated to report in connection with the policy?
b. Would it make any difference if the acumulated dividends equaled 58.000 instead of $4,0007
Requirement a. How much income is Glen obligated to report in connection with the policy
Glen would report only the interest
$1.500 as taxable income
Requirement b. Would it make any difference if the accumulated dividends equaled $8.000 instead of $4,0007
V Glen would be taxed on
rates avalable to recipients of corporate dividend distributions.
The total tavable amount ie
The amount
for the lower tax
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