How much must Alice and Kay each include in gross income

Assignment Help Accounting Basics
Reference no: EM132665906

Problem - The LMN Partnership has a group term life insurance plan. Each partner has $150,000 of protection, and each employee has protection equal to twice his or her annual salary. Employee Alice (age 32) has $90,000 of insurance under the plan, and partner Kay (age 47) has $150,000 of coverage. Because the plan is a "group plan," it is impossible to determine the cost of coverage for an individual employee or partner.

a. Assuming that the plan is nondiscriminatory, how much must Alice and Kay each include in gross income as a result of the partnership paying the insurance premiums?

b. Assume that the partnership is incorporated. Kay becomes a shareholder and an employee who receives a $75,000 annual salary. The corporation provides Kay with $150,000 of group term life insurance coverage under a nondiscriminatory plan. What is Kay's gross income as a result of the corporation paying the insurance premiums?

Reference no: EM132665906

Questions Cloud

What is the unit cost of the goods transferred to storeroom : A job order for 500 units of children party giveaway, What is unit cost of the goods transferred to the storeroom if the loss is charged to total production?
Calculate Herbert gross income : He received dividends of $550. His luck was not all bad; in December, he won $1,500 in the lottery on a $5 ticket. Calculate Herbert's gross income
Explain how the intervention would be evaluated : Create a professional presentation of your evidence-based intervention and change proposal to be disseminated to an interprofessional audience of leaders.
What is the cost of the inventory on january : What is the cost of the inventory on January 31 using FIFO method? Returned 1,000 units to supplier from January 15 purchase.
How much must Alice and Kay each include in gross income : Assuming that the plan is nondiscriminatory, how much must Alice and Kay each include in gross income as a result of the partnership paying insurance premiums
How much will the company bid for the ceramic plates : Loose Company, The company wants a markup of 45% of its total production cost. How much will the company bid for the ceramic plates?
What the results of the assessment suggest about the health : Clearly, diagnosis is a critical aspect of healthcare. However, the ultimate purpose of a diagnosis is the development and application of a series of treatments
What would be value need to include in business combination : Fair value @ 90000 at 1st July 2015 and on 18 August 2015 sold for $120000. What would be the value need to include in the business combination?
What is her gross income from the annuity payments : Assume that Pam retired in June 2018 and collected six annuity payments that year. What is her gross income from the annuity payments in the first year

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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