exam 1 graded

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G R A D E D E TA I L S - A L L Q U E S T I O N S
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Question 1. Question : Bob had a terminal illness and realized that he “can’t take it with him.” Therefore, he cashed in his life insurance policy and received $100,000. He had paid $40,000 in premiums on the policy. He used the money to fulfill his lifelong ambitions of going to the Super Bowl and driving an expensive sports car. Was Bob’s behavior consistent with the Congressional intent in providing the tax exemption for terminally ill taxpayers that he was permitted to use? Do you believe this is a loophole that needs to be closed? Why or why not? Student Answer: No, Bob's behavior was not consistent with the intent in providing the tax exemption for terminally ill taxpayers. This exemption was intended to pay for the taxpayer's long-term care. There has to be some way for the IRS to know that the
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