5QX. Don Driller is provided with $200,000 of group-term life insurance by his employer. Based...
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5QX. Don Driller is provided with $200,000 of group-term life insurance by his employer. Based on the IRS uniform premium cost table, the total annual cost of a policy of this type is $9.00 per $1,000 of coverage. Don's required contribution to the cost of the policy is $2.00 per $1,000 of coverage per year. Don was covered for the full 12 months of 2019. How much of the cost must Don include in his income? a) $250 b) $390 c) $630 d) $840 e) None of the above.
Correct Answer (e) Don Driller must include in his gross income premiums on $150,000 ($200,000 less tax favored coverage of $50,000) of group term life insurance Value of Excess coverage $150,000/1,000 $9 $1,350 Less: $200,000 $2/$1,000 (Amount paid by Taxpayer) 400 Amount Don must include in gross income $950 See also Page 5-28
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