D is corrent. The $300 dividend on Gail???s life insurance policy is treated as a reduction of the cost of insurance (because total dividends have not yet exceeded accumulated premiums paid) and is excluded from gross income. Thus, Gail will report the $300 dividend on common stock and the $600 dividend on preferred stock, a total of $900 as dividend income for 2012.
A is incorrect. The $300 dividend on Gail???s life insurance policy is treated as a reduction of the cost of insurance (because total dividends have not yet exceeded accumulated premiums paid) and is excluded from gross income. Thus, Gail will report the $300 dividend on common stock and the $600 dividend on preferred stock, a total of $900 as dividend income for 2012.
A is incorrect. The $300 dividend on Gail???s life insurance policy is treated as a reduction of the cost of insurance (because total dividends have not yet exceeded accumulated premiums paid) and is excluded from gross income. Thus, Gail will report the $300 dividend on common stock and the $600 dividend on preferred stock, a total of $900 as dividend income for 2012.
A is incorrect. The $300 dividend on Gail???s life insurance policy is treated as a reduction of the cost of insurance (because total dividends have not yet exceeded accumulated premiums paid) and is excluded from gross income. Thus, Gail will report the $300 dividend on common stock and the $600 dividend on preferred stock, a total of $900 as dividend income for 2012.
