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Business, 19.06.2020 01:57 tynan74

Twenty years ago, Mr. Wallace purchased a $250,000 insurance policy on his own life and named his daughter as sole beneficiary. He has paid $14,250 total premiums to keep this policy in force. This year, he liquidates the policy for its $20,000 cash surrender value. Which of the following statements is true?A) Mr. Wallace recognizes $5,750 capital gain on the liquidation. B) Mr. Wallace recognizes $5,750 ordinary income on the liquidation. C) Mr. Wallace recognizes no gain on the liquidation. D) Mr. Wallace recognizes $20,000 ordinary income on the liquidation.

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