Maria has spent over $100,000 on medical bills and a nurse aid who lives in herhouse. She has been chronically ill for several months. She owns a $1,000,000 lifeinsurance policy. Due to her chronic illness, Maria expects to have an additional$600,000 in medical bills in the current year. She has asked that the life insurancepolicy pay the $1,000,000 to her now. If Maria receives $1,000,000, how much canshe exclude from her income?OA) $700,000OB) $0OC) $100,000OD) $1,000,000

D) $1,000,000Explanation:Step 1:The answer to Maria's situation involves understanding the tax…

Answered: Maria has spent over $100,000 on…

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter2: Gross Income And Exclusions

Section: Chapter Questions

Problem 16P

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Similar questions

Valentino is a patient in a nursing home for 45 days of 2019. While in the nursing home, he incurs total costs of 13,500. Medicare pays 8,000 of the costs. Valentino receives 15,000 from his long-term care insurance policy, which pays while he is in the facility. Assume that the Federal daily excludible amount for Valentino is 370. Of the 15,000, what amount may Valentino exclude from his gross income?
Tia is married and is employed by Carrera Auto Parts. In 2019, Carrera established high-deductible health insurance for all its employees. The plan has a 2,700 deductible for married taxpayers. Carrera also contributes 5 percent of each employees salary to a Health Savings Account. Tias salary is 30,000 in 2019 and 32,000 in 2020. Tia makes the maximum allowable contribution to her HSA in 2019 and 2020. She received 600 from the HSA for her 2019 medical expenses. In 2020, she spends 1,400 on medical expenses from her HSA. The MSA earns 28 in 2019 and 46 in 2020. a. What is the effect of the HSA transactions on Tias adjusted gross income? b. How much does Tia have in her HSA account at the end of 2020?
Tanner has a family and has chosen Plan C. Tanner has not used health insurance yet this year. Tanner goes to the hospital for some services and the bill is $1,000. How much of the bill will Tanner’s insurance pay?How much of the bill will Tanner pay
Ashley has an individual medical expense insurance policy with a $1,000 calendar year deductible and a 20% coinsurance clause. Ashley had outpatient surgery to remove a bunion on her foot and incurred medical bills of $10,000. How much will Ashley's insurer pay?
Susan is in an indemnity health insurance plan that has a $500 deductible and a co- insurance percentage of 80/20. Susan falls down a flight of stairs and breaks her leg. She is hospitalized and the total cost of the hospital stay is $12,000. How much of the $12,000 is Susan responsible to pay and how much will the insurance company pay?
Theresa Morgan of Boone, IA, age 55, recently suffered a stroke. Her total bill for this care was $125,500. After leaving the hospital, she spent 25 days in a nursing home that cost $170 per day. Theresa, who earns $4,500 per month, missed two months of work. Theresa had a health insurance plan through her employer. The policy had a $1,000 deductible and an 80/20 coinsurance clause with a $2,000 coinsurance cap. She had also accumulated 21 sick days (equivalent to one month) at work. Otherwise she had no long-term care or disability insurance. She was out of work for a total of 42 days. How much of Theresa's direct medical expenses was paid by her insurance policy? C How much income did Theresa lose?
For several years, Annie’s employer has offered a traditional indemnity plan for healthcare coverage for herself, her husband Jim, and their children, Tess and Tasha. Annie and Jim are in their early 30s; their children are 10-years old twins. Recently, the monthly premium for their insurance coverage increased drastically. Annie’s employer has decided to offer a high-deductible health plan where the family will have an initial deductible of $ 5000. The cost of this high-deductible plan has a monthly premium that is almost 50% lower than the indemnity plan. Describe the steps Annie might follow in deciding whether to choose this plan or to remain with the more expensive indemnity plan.

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