Moonglow, Inc., purchases a group-term life insurance plan for all its employees. Harold receives $250,000 of insurance for the current year at a cost to the company of $2,500. The IRS Table of Premium values indicates that premiums are $1.08 annually per $1,000 of protection. How much gross income does Harold have from the purchase of the life insurance by Moonglow, Inc.?

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The IRS allows the first $50,000 of group-term life insurance coverage to be excluded from income. Harold's coverage is $250,000, so $200,000 is taxable. Using the IRS Table, the taxable amount is $1.08 per $1,000 of coverage over $50,000. Therefore, $1.08 x 200 = $216.