Carin, a Widow, Elected to Receive the Proceeds of a $150,000

Multiple Choice

Carin, a widow, elected to receive the proceeds of a $150,000 life insurance policy on the life of her deceased husband in 10 installments of $17,500 each.Her husband had paid premiums of $60,000 on the policy. In the first year, Carin collected $17,500 from the insurance company.She must include in gross income:

A) $0.
B) $2,500.
C) $10,000.
D) $25,000.
E) None of the above.