question 18 of 85\nunder which of the following conditions would life insurance proceeds be taxable by the…

question 18 of 85\nunder which of the following conditions would life insurance proceeds be taxable by the federal government?\na. if paid to the policyowner\nb. if there is a transfer for value\nc. if collaterally assigned to a lender\nd. if taken as a lump sum

question 18 of 85\nunder which of the following conditions would life insurance proceeds be taxable by the federal government?\na. if paid to the policyowner\nb. if there is a transfer for value\nc. if collaterally assigned to a lender\nd. if taken as a lump sum

Answer

Brief Explanations:

Life insurance proceeds are generally not taxable. However, under the transfer - for - value rule, if a life insurance policy is transferred for valuable consideration (other than certain exceptions), the proceeds may be taxable to the extent they exceed the amount paid for the policy plus any premiums paid. When paid to the policyowner, collaterally assigned to a lender, or taken as a lump sum, they are usually non - taxable.

Answer:

B. If there is a transfer for value