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Fran dies this year. Her spouse, Carl, is the beneficiary of a $100,000 life insurance policy. Carl elects to receive the proceeds in 10 equal installments of $11,000. In the current year, Carl receives $11,000.
The amount included in Carl's current year gross income is $_____.

Respuesta :

Answer:

Gross income = $1,000

Explanation:

Given:

Total beneficiary of insurance amount = $100,000

Total number of equal payment = 10

Each installment amount receives = $11,000

Computation of each payment amount proposed:

Each payment amount proposed = $100,000 / 10

Each payment amount proposed = $10,000

Computation of gross income:

Gross income = Each installment amount receives - Each payment amount proposed

Gross income = $11,000 - $10,000

Gross income = $1,000