Data Corporation has four employees and provides group term life insurance

| September 7, 2016

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?

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