BASICIM CH05 - 1 Instructors Manual Chapter 5 Gross IncomeExclusions Life Insurance Proceeds 2 $5,000 Proceeds less investment in contract Receipt of

BASICIM CH05 - 1 Instructors Manual Chapter 5 Gross...

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1 Instructor’s Manual Chapter 5 Gross Income—Exclusions Life Insurance Proceeds 2.$5,000. Proceeds less investment in contract. Receipt of life insurance is in essence therecovery of a capital asset. 4.Prior to 1994, the amount of Social Security benefits included in income was the lesserof one-half of the benefits or one-half of the excess of taxpayer's income over base($25,000 single, $32,000 joint return, zero for married filing separately). For 1994 andlater years, taxpayers with provisional income exceeding thresholds ($34,000, singletaxpayers; $44,000, joint taxpayers) will include the lesser of: b.The total of the following: (2)The smaller of (a) the amount of Social Security benefits included under 6.One justification is to stimulate economic development. Another reason is theconstruction of major projects. For a more extensive list, refer back to ¶5075. 8.Net cost of annuity×Payment received under annuity=Excludable Portion 10.Employer contributions are excluded from employees' gross income. 12.Under a joint and survivor annuity, two individuals who are alive receive periodicbenefits for life. In calculating benefits, both spouses must be taken into consideration. Chapter 5
2 CCH Federal Taxation— Basic Principles When one spouse dies, the surviving spouse receives payments until his or her death, at which time all payments cease. Educational Assistance Plans 16. $2,000. Grants or awards for items other than tuition, books, and fees must be included in gross income. Group-Term Life Insurance 18. Yes. Premiums for group-term life insurance coverage over $50,000 per year must be included in income regardless of income level, as long as the plan is not discriminatory. The amount to be included in income is determined by the uniform premium schedule covered under Reg. §1.79-3(d)(2).

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