Question - Data Corporation has four employees and provides group term life insurance coverage for all four employees. Coverage is nondiscriminatory and is as follows:
|
Employee
|
Age
|
Key Employee
|
Coverage
|
Actual Premiums
|
|
Andy
|
62
|
yes
|
$200,000
|
$4,000
|
|
Bob
|
52
|
yes
|
40,000
|
700
|
|
Cindy
|
33
|
no
|
80,000
|
600
|
|
Damitria
|
33
|
no
|
40,000
|
300
|
a. How much may Data Corporation deduct for group term life insurance premiums?
b. How much income must be reported by each employer?