J is the two insurance policies on the life of his spouse, M. On M\'s death, 3 t

Question

J is the two insurance policies on the life of his spouse, M. On M's death, 3 tissues, per month on insurance policy 1. $100 of the $1,100 monthly payment on mustache policy 1 is attributable to interest on the insurance proceeds. On M's death, 3 also received $4,400 per month on insurance policy 2. $400 of the $4,400 per month paid on insurance policy 2 is attributable to interest on the insurance proceeds. Assuming that 3 received payments on both insurance policies throughout 2015, what amount attributable to the payments made on insurance policies 1 and 2 is included in J's gross income for 2015? $66,000 $6,000 $5,000 $0 None of the above

Explanation / Answer

Only the interest portion on both the policies is to be included in J's Gross income i.e. ($100 + $400) x 12 = $6000

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