Question Clausen is exhausted and would like to spend time enjoying the remainder of his...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Question Clausen is exhausted and would like to spend time enjoying the remainder of his life. He is terminally ill and is expected to live less than a year. Assume that he would like to use his life insurance policy to fund the remainder of his life. Which of the following statements is correct? AClausen could exchange the policy in a exchange for an annuity and will be subject to income tax on the transfer. BIf Clausen borrows from the policy, then the loan will be considered a taxable distribution. CIf Clausen surrenders his policy for accelerated death benefits, he will not be subject to income tax on the gain because he is terminally ill. DIf Clausen's brother Charlie purchases the policy from Clausen at the fair market value, Charlie will receive the insurance proceeds income tax free at Clausen's death.
Question
Clausen is exhausted and would like to spend time enjoying the remainder of his life. He is terminally ill and is expected to live less than a year. Assume that he would like to use his life insurance policy to fund the remainder of his life. Which of the following statements is correct?
AClausen could exchange the policy in a exchange for an annuity and will be subject to income tax on the transfer.
BIf Clausen borrows from the policy, then the loan will be considered a taxable distribution.
CIf Clausen surrenders his policy for accelerated death benefits, he will not be subject to income tax on the gain because he is terminally ill.
DIf Clausen's brother Charlie purchases the policy from Clausen at the fair market value, Charlie will receive the insurance proceeds income tax free at Clausen's death.
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.