Stack Inc. owns a $1 million insurance policy on the life of Mary Stack, the corporate CEO. The corporation is the policy beneficiary. Stack's annual premium on the policy is $3,160. Which of the following statements is true?
A) Stack Inc. can deduct the annual premium as a business expense. If Stack ever collects the $1 million death benefit, the benefit is excluded from gross income.
B) Stack Inc. can deduct the annual premium as a business expense. If Stack ever collects the $1 million death benefit, the benefit is included in gross income.
C) Stack Inc. can't deduct the annual premium as a business expense. If Stack ever collects the $1 million death benefit, the benefit is included in gross income.
D) Stack Inc. can't deduct the annual premium as a business expense. If Stack ever collects the $1 million death benefit, the benefit is excluded from gross income.
Correct Answer:
Verified
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