Peter age 50 surrenders his modified endowment contract is the gain treated as taxable income and a penalty tax is imposed on the gain in terms of federal income taxes.
What is taxes?
The term taxes refer to known as monetary charges. The government are charge extra amount for goods and services. The amount of tax are collect the government account and spent on the public welfare.
Peter age is 50 are surrenders own self because his modified endowment contract the federal income taxes are charge the penalty tax and taxable income.
As a result, the gain of taxable income and penalty imposed.
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