Question

John Hoover, age 35, has $70,000 of protection under his employer's group term life insurance plan, for which he makes a monthly contribution of $1.50. His wife is named as beneficiary. The actual cost to the employer for his protection is $.20 per month per $1,000 of insurance, and the uniform premium for group term insurance under the Internal Revenue Code is $.09 per month per $1,000 of insurance. Under Sec. 79, what is the annual amount that Hoover, who is not a key employee, must report for federal income tax purposes because of his group term insurance protection?

A. $3.60
B. $30.00
C. $21.60
D. $57.60

Answer 1

Answer is C= $21.6

The explanation is given below.