IdeasCuriosas - Every Question Deserves an Answer Logo

In Business / College | 2025-07-05

Braxton and Kaih have just inherited $50,000. Which of the following statements is true?
A. They should invest this money in corporate bonds to save on taxes.
B. The $50,000 will be taxable income in the year received, and they should invest this money in corporate bonds to save on taxes.
C. The $50,000 will be taxable income in the year received.
D. The $50,000 is excluded from gross income.

Asked by Jrmille9

Answer (2)

Inherited money is generally excluded from gross income.
Evaluate each statement based on this fact.
Statements a, b, and c incorrectly imply the inheritance is taxable.
The correct statement is: The $50,000 is excluded from gross income. ​

Explanation

Understanding Inheritance Taxes When someone inherits money, it's important to know whether that money is considered taxable income. According to tax laws in the United States, inherited money is generally excluded from gross income for federal income tax purposes. This means that Braxton and Kaih do not have to report the $50,000 as income on their tax returns.

Evaluating the Statements Based on this understanding, we can evaluate the given statements:



a. They should invest this money in corporate bonds to save on taxes. - This statement implies that the money is taxable, which is incorrect.
b. The $50,000 will be taxable income in the year received, and they should invest this money in corporate bonds to save on taxes. - This statement is also incorrect because it states that the inheritance is taxable.
c. The $50,000 will be taxable income in the year received. - This statement is incorrect for the same reason as above.
d. The $50,000 is excluded from gross income. - This statement aligns with the tax laws regarding inheritance.


Conclusion Therefore, the correct statement is that the $50,000 is excluded from gross income.

Examples
Imagine a family where a grandmother leaves an inheritance to her grandchildren. This inheritance, according to tax laws, is typically excluded from the grandchildren's gross income. This exclusion allows the grandchildren to use the inherited money for education, investments, or other needs without the burden of immediate income taxes. Understanding this aspect of inheritance can help families plan their finances more effectively and make informed decisions about managing inherited assets.

Answered by GinnyAnswer | 2025-07-05

The correct statement is that the $50,000 inherited by Braxton and Kaih is excluded from gross income for tax purposes. Therefore, they do not have to treat this inheritance as taxable income on their tax returns. This understanding can help them manage the inherited funds effectively without tax concerns.
;

Answered by Anonymous | 2025-08-06

Related Questions in Business

[Answered] An electric device delivers a current of [tex]$15.0 A$[/tex] for 30 seconds. How many electrons flow through it?

[Answered] Select the best answer for the question. 6. __________ is the amount of time you spend studying or working versus the amount of time you spend on yourself. A. Self-care B. Time management C. Work-life balance D. Self-actualization

[Answered] Mike is an agent making purchase orders for Tammy. Tammy passes away before the agency contract is voluntarily ended. The agent has already done half of the work assigned. What is the result related to the status of the agency?

[Answered] Solve the problem using $6.2 \%$, up to $ \$128,400$ for Social Security tax and using $1.45 \%$, no wage limit, for Medicare tax. What are the social security and Medicare withholdings (in \$) for an executive whose annual gross earnings are $ \$131,500$? Social Security $ \$\square$ Medicare $ \$\square$

[Answered] Is the Customer Always Right?, p 207 Is the Customer Always Right? At an independently owned Pizza Hut franchise in Oklahoma, two regular customers made sexually offensive remarks to a female employee named Lockard, who then told her boss she did not like waiting on them. One evening, these customers again entered the restaurant, and her boss instructed Lockard to wait on them. She did, but this time the customers became physically abusive. Although it is the employee’s duty to provide good customer service, that does not mean accepting harassment. Lockard sued her employer, the owner of the franchise, for failing to take her complaints seriously and for making her continue to suffer sexual harassment and assault by customers. The jury ruled in her favor, awarding her $360,000, and an appeals court upheld the judgment. 1. Clearly, no employee should expect to be physically assaulted, but how far should an employee be expected to go in the name of customer service? 2. Is taking verbal taunts expected? Why or why not? 3. Just as every employee should treat customers and clients with respect, so every employer is ethically—and often legally—obligated to safeguard employees on the job. This includes establishing a workplace atmosphere that is safe and secure for workers. If you were the owner of this Pizza Hut franchise, what protections might you put in place for your employees?