Sandy is married,files a joint return,and expects to be in the 28% marginal tax bracket for the foreseeable future.All of his income is from salary and all of it is used to maintain the household.He has a paid-up life insurance policy with a cash surrender value of $100,000.He paid $60,000 of premiums on the policy.His gain from cashing in the life insurance policy would be ordinary income.If he retains the policy,the insurance company will pay him $3,000 (3%)interest each year.Sandy thinks he can earn a higher return if he cashes in the policy and invests the proceeds.

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The Answer of Sandy is married,files a joint return,and expects to be in the 28% marginal tax bracket for the foreseeable future.All of his income is from salary and all of it is used to maintain the household.He has a paid-up life insurance policy with a cash surrender value of $100,000.He paid $60,000 of premiums on the policy.His gain from cashing in the life insurance policy would be ordinary income.If he retains the policy,the insurance company will pay him $3,000 (3%)interest each year.Sandy thinks he can earn a higher return if he cashes in the policy and invests the proceeds.

Sandy Is Married,files a Joint Return,and Expects to Be in the 28