1 L0.2 Donald was killed in an accident while he was on the job in 2018. Darlene

Question

1 L0.2 Donald was killed in an accident while he was on the job in 2018. Darlene, Donald's wife, received several payments as a result of Donald's death. What is Darlene's gross income from the items listed below? Donald's employer paid Darlene an amount equal to Donald's three months salary ($60,000), which is what the employer does for all widows and widowers a. of deceased employees. b. Donald had $20,000 in accrued salary that was paid to Darlene. c Donald's employer had provided Donald with group term life insurance of $480,000 (twice his annual salary), which was payable to his widow in a lump sum. Premiums on this policy totaling $12,500 had been included in Donald's gross income under S 79. Donald had purchased a life insurance policy (premiums totaled $250,000) t paid $600,000 in the event of accidental death. The proceeds were pay able to Darlene, who elected to receive installment payments as an annuity of $30,000 each year for a 25-year period. She received her first installment this year. counting firm. The partners have entered Ray to purchase Carin's partnership Casin are nartners in an ac , at 120% of the

Explanation / Answer

ANSWER:

Here we have to determine the Donald Gross Income,

Given data,

we know that,

=$750,000.

=(60,000/750,000)*30,000=0.08*30,000=$2,400 .

=$30,000-$2400

=$27,600 .

Now construct a sheet to findout Gross income of Donald,

Sl no Amount Received Amount Taxable 1. Employement Payments 60,000 60,000 2. Accurued salary(Before deadth) 20,000 20,000 3. Group term life insurance 480,000 - 4. Annual life insurance 30,000 27,600 5. Total Gross Income $590,000 107,600

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