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Unformatted text preview: duct a total of $4,000 for keyman and group life insurance premiums
paid in 1989.
Rule: Premiums on group-term life insurance covering the lives of employees are deductible by the
employer, unless the employer is a direct or indirect beneficiary.
Insurance expense on officers lives where the corporation is beneficiary are not deductible.
Group term insurance deductible
Keyman insurance deductible
Total deductible $4,000
$4,000 Choices "a", "b", and "d" are incorrect, per the above rule. CPA-02220 Type1 M/C 108. CPA-02220 A-D May 90 II #34 Corr Ans: A PM#14 R 3-99 Page 16 John Budd is the sole stockholder of Ral Corp., an accrual basis taxpayer engaged in wholesaling
operations. Ral's retained earnings at January 1, 1989 amounted to $1,000,000. For the year ended
December 31, 1989, Ral's book income, before federal income tax, was $300,000. Included in the
computation of this $300,000 were the following:
Dividends received on 500 shares of stock of a taxable domestic corporatio...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.
- Fall '10
- The Land