Discuss the tax treatment of the proceeds of policy

Assignment Help Finance Basics
Reference no: EM133074397

David Knox (he/him/his) and his business partner, Skylar (them/they), run a company called Numbers Pty Ltd together. Skylar is the creative brain behind Numbers Pty Ltd. The business has taken out a life and total and permanent disability (TPD) insurance policy on Skylar's life so that if they died or became permanently disabled the business would be able to re-pay the loans that were taken out with Skylar as guarantor. Numbers Pty Ltd owns the insurance policy and pays the premiums. Ten months later, Skylar has an accident that leaves them with a total and permanent disability. Numbers Pty Ltd receives the proceeds of the TPD insurance policy. Discuss the tax treatment of the proceeds of this policy.

Reference no: EM133074397

Questions Cloud

Maximize profit based on the maximin criterion : A bakery bakes fresh bread every day which costs $1.5 (per loaf) and sells them for $2.5 (per loaf). They bake batches of 15. Any unsold bread can be sold for 2
What amount should vaughn report as interest expense : Interest is payable semiannually on January 1 and July 1. What amount should Vaughn report as interest expense for the six months ended June 30, 2021
What is harold margin of safety in dollars : Harold McWilliams owns and manages a general merchandise store in a rural area of Virginia. What is Harold's margin of safety (MOS) in dollars
Management of credit analysis report : State the section of 'Management " of credit analysis report by using the report of Sydney Airport.
Discuss the tax treatment of the proceeds of policy : David Knox (he/him/his) and his business partner, Skylar (them/they), run a company called Numbers Pty Ltd together. Skylar is the creative brain behind Numbers
Cost of the product : The cost of the product today is 55,000 euros. The spot exchange rate today is .8233 euros per dollar. How much is the cost today in dollars?
Determine the current liability to be reported on december : Of the Unearned Subscription Revenue balance, 25% were earned during 2020. Determine the current liability to be reported on December 31, 2020
What is the reward-to-variability ratio : Asset A has an expected return of 11% and a standard deviation of 7%. The risk-free rate is 4%. What is the reward-to-variability ratio?
Prepare march bank reconciliation in good form : A $347 check to a supplier in payment of account was erroneously ?recorded on Batters' books as $437 ? Prepare March bank reconciliation in good form

Reviews

Write a Review

Finance Basics Questions & Answers

  Calculate zero rates for maturities of months

Calculate (annualized) zero rates for maturities of 6 months, 12 months and 18 months.

  Formulate the integer programming model

The Texas Consolidated Electronics Company is contemplating a research and development program encompassing eight research projects. The company is constrained from embarking on all projects by the number of available management scientists (40) an..

  Record transactions for the sale of inventory

Bingerton Industries uses a perpetual inventory system. The company began the year with inventory of $75,000.

  Expected payoff to ff existing shareholders

What is the expected payoff to FF's existing shareholders? How would your answers change if the bondholders could convert the bond to 80% of FF's equity?

  What is the internal rate of return

The cash inflows generated by the project are estimated at $76,000 for the first two years and $30,000 for the following two years. What is the internal rate of return?

  What would be the consequences if libor raises

Why would LIBOR rise? What would be the consequences if LIBOR raises? As an investor, how should you be looking at LIBOR? Do you want LIBOR to go up

  Being able to estimate future earnings of a company

Being able to estimate future earnings of a company over at least five years is a critical decision variable for Warren Buffet when he analyzing whether to buy an interest in a company.

  What is the payback period

A project has an initial cost of $6,500. The cash inflows are $900, $2,200, $3,600, and $4,100 over the next four years, respectively. What is the payback period?

  Average worker in organization

Are U.S. Executives paid too much particularly compared to the average worker in their organization?

  What information do users need about current assets

What information do users need about current assets? What is meant by FIFO, LIFO and the average cost method of pricing issues of goods? How is a provision for doubtful debts decided upon?

  Find the purchase price

A $25000 5-year bond has seal-annual coupons of $850. An investor buys the bond at a price that gives a return to maturity of i^(2) = 0.07.

  Prepare a cash budget for august 2011 for pdc and describe

A. Prepare PDC’s sales schedule, purchases schedule, and wages schedule for August 2011. B. Prepare a cash budget for August 2011 for PDC and describe how the forecast affects the end-of-month cash balance.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd