Green, Inc., provides group term life insurance for all of its employees.The coverage equals twice the employee's annual salary.Sam, a vice-president, worked all year for Green, Inc.and received $250,000 of coverage for the year at a cost to Green of $3,000.The Uniform Premiums (based on Sam's age) are $.30 per month for $1,000 of protection.How much must Sam include in gross income this year?

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The IRS allows the first $50,000 of group term life insurance coverage to be excluded from income. Sam's coverage is $250,000, so $200,000 is taxable. The cost of $200,000 coverage is calculated as $0.30 per $1,000 per month, which is $0.30 x 200 = $60 per month. For a year, it is $60 x 12 = $720.