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Ray Of Light [21]
3 years ago
14

The owner of a life insurance policy has decided to surrender the life insurance policy to the insurer. Since inception of the l

ife insurance contract, the owner has paid premiums of $100,000 and received cash policy dividends equal to $20,000. If at the surrender date, the owner receives a cash payment of $140,000 from the insurer, what is his gain/ loss subject to income tax on the life insurance policy?
Business
1 answer:
svet-max [94.6K]3 years ago
8 0

Answer:

$60,000

Explanation:

Data provided in the question:

Premiums paid = $100,000

Cash policy dividends received = $20,000

Cash surrender value = $140,000

Now,

The owners adjusted basis in the property

= Premiums paid  - Cash policy dividends received

= $100,000 - $20,000

= $80,000

Therefore,

The gain on the policy = Cash surrender value -  owners adjusted basis

= $140,000 - $80,000

= $60,000

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BE16.11 (LO 4) Tomba Corporation had 300,000 shares of common stock outstanding on January 1, 2020. On May 1, Tomba issued 30,00
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Answer

1) Issued for Cash

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3 years ago
There are four seats on the board of directors of MMT, Inc., up for election. The firm has 175,000 shares of stock outstanding a
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Answer:

We must spend $575,023 to acquire sufficient shares to guarantee your election to the board

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Number of shares = (175,000 * 1) / (4 + 1) + 1

Number of shares = (175,000 / 5) + 1

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Number of shares = 35,001

We control 35,001 if we wants to guarantee election to the board.

The additional no of shares that we need to buy is as calculated below as we already owns 10,000 shares

Cost = (Number of shares required - Number of shares already owned) * Price per share

Cost = (35,001 shares - 10,000 shares) * $23

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Cost = $575,023

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4 0
3 years ago
The rate card for a magazine mentioned that the one-time cost for a full-page black-and-white ad was $930. The magazine had a to
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Magazine's cost per thousand (CPM) = 930,000 / 15,000

Magazine's cost per thousand (CPM) = $62

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