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- MC: Topic: Income Taxation Statement 1: Proceeds of life insurance received by the beneficiary of the insured is a return on capital. Statement 2: The excess of proceeds over total premiums paid which is received by the beneficiary of the insured decedent is gross income and is taxable. * Both statements are true Both statements are false Only statement 1 is true Only statement 2 is trueQ5: Research about and in your own words, describe the different EXCLUSIONS FROM GROSS INCOME: Ø Proceeds of life insurance policyØ Amount received by the insured as a return of premiumØ Gift, bequest, or descentØ Compensation for injuries or sicknessØ Income exempt under treatyØ Retirement benefits, pensions, gratuities, etc.Question 8: Collectively, Social Security tax and Medicare tax are referred to as FICA taxes. Answer: A. O True В. O False
- Question 20 True or False. The concept of the inevitable gain in a life insurance policy indicate that using insurance proceeds will not cost the estate more than using IRC Sections 6166 or 6161 to pay the tax. True FalseMultiple Choice Qsn .You have to choose one answer. 1.Which of the following statements is correct? a. Gains that are ordinary income will be assessable income under s .6-5 of ITAA 1997. b. Gains will be ordinary income if they are the type of gains that courts of law consider to be of an income character. c. A gain that comes in regularly/periodically is more likely to be ordinary income than a lump-sum gain. d. Whether or not a gain arises from an illegal activity does not affect whether it is ordinary income. e. All of the above. (2) Which of the following statements is correct? a. Capital gains and capital losses arising from a CGT event are always assessed to the individual partners of a partnership according to their interest. b. partner can have more than one interest in a partnership asset. c .There is a disposal of part of an interest in a partnership asset whenever a new partner is admitted to a partnership. d.All of the aboveO C. Subrogation O D. Indemnity 4. An insured may not be compensated by the insurance company in an amount exceeding the insured's economic loss refers to O A. principle of contribution O B. principle of utmost good faith O C. principle of indemnity O D. principle of proximate cause 5. Which of the following actions showcases the principle of "uberrima fides"? *
- Question 14 what give rises to the changes in PBO balance? A- service cost and interest cost B- prior service cost that is caused by a change in pension formula C- changes in life expectancy estimates D- all of the above O A O C ODQuestion 3 Exclusions from gross income, except: Interest on the price of land covered by the Presidential Decree on land reform Interest payments on proceeds of life insurance held by the insurer. GSIS, SSS, Philhealth and Pag-ibig contributions and union dues of individuals. Gains realized by an investor upon redemption of shares of stock in a mutual fund company Question 4Question 17 S1: Employee-sponsored retirement plans can be categorized into two: current service cost and projected benefit obligation. S2: Liabilities pertains to the settlements which resulted in an outflow of resources embodying economic benefits. S3: PAS 19, provides that only the unvested past service costs shall be recognized as expense immediately. one statement is true two of the statements are true all statements are false all statements are true
- Which of the following are correct tax-free exchanges? Life insurance for life insurance Life insurance for an annuity An annuity for an annuity An annuity for a life insurance policy 1 only 1, 2 1, 2, 3 1, 2, 3, 4Question 12 of 20 View Policies When a company amends a pension plan, for accounting purposes, prior service costs should be O recorded in other comprehensive income (PSC). O reported as an expense in the period the plan is amended. O amortized in accordance with procedures used for income tax purposes. O treated as a prior period adjustment because no future periods are benefited.1.Which of the following is a permanent difference? Dividends from a domestic corporation Property insurance premiums paid Commissions from consignment sales Donations received Interest on savings deposit