Question

9) Paul, a cash-basis taxpayer, died on September 30, 2019. His wife, Maria, provides you with the following information.

From January 1, 2019 until his death, Paul received a salary of $35,000. Maria received a salary of $68,000 during 2019. Paul had earned commissions of $20,000 which Maria received after his death. Maria was the beneficiary of a $100,000 whole life policy purchased by Paul and paid to her in lump sum, and a $50,000 group term life insurance policy purchased by Paul's employer. The employer had paid premiums of $250 on Paul's behalf. In addition, the corporation paid Maria a $10,000 employee death benefit in Paul's name, includible in gross income. All employees' families received similar benefits regardless of financial need. Paul and Maria had itemized deductions of $25,600. What is the amount of their taxable income on their 2019 tax return?

Answer 1

Answer:-

Particulars	Amount
Paul Salary	35000
Maria's Salary	68000
Commission received by Mark	20000
Employee death benefit	10000
Gross adjusted income	133000
Less:
Itemized deductions	-25600
Personal Exemptions	-4,050
Taxable income of 2017	103350

Notes:

1. The proceeds from a decedent's life insurance policy paid by reason of his or her death generally are excluded from income. The exclusion applies to any beneficiary, whether a family member or other individual, a corporation or a partnership.

2. The Personal exemption for the year 2019 was $ 4,050.