An insurance agent (interviewed in jonathan clements, "dare to live dangerously: passing on some insurance can pay off," wall street journal, july 23, 2005, d1) states, "on paper, it never makes sense to have a policy with low deductibles or carry collision on an old car." but the agent notes that raising deductibles and dropping collision coverage can be a tough decision for people with a low income or little savings. collision insurance is the coverage on a policyholder's own car for accidents where another driver is not at fault. suppose that the loss is $5 comma 200 if an old car is in an accident. during the six-month coverage period, the probability that the insured person is found at fault in an accident is startfraction 1 over 36 endfraction . suppose that the price of the coverage is $150. should a wealthy person purchase the coverage?

Nell and kirby are in the process of negotiating their divorce agreement. what should be the tax consequences to nell and kirby if the following, considered individually, became part of the agreement? a. in consideration for her one-half interest in their personal residence, kirby will transfer to nell stock with a value of $200,000 and $50,000 of cash. kirby's cost of the stock was $150,000, and the value of the personal residence is $500,000. they purchased the residence three years ago for $300,000.nell's basis for the stock is $ xkirby's basis in the house is $ xb. nell will receive $1,000 per month for 120 months. if she dies before receiving all 120 payments, the remaining payments will be made to her estate.the payments (qualify, do not qualify) as alimony and are (included in, excluded from) nell's gross income as they are received.c. nell is to have custody of their 12-year-old son, bobby. she is to receive $1,200 per month until bobby (1) dies or (2) attains age 21 (whichever occurs first). after either of these events occurs, nell will receive only $300 per month for the remainder of her life.$ x per month is alimony that is (included in, excluded from) nell's gross income, and the remaining $ x per month is considered (child support, property settlement) and is (nontaxable, taxable) to nell.