Larry purchased an annulty from an insurance company that promises to pay him $1,000 per month for the rest of his Iife. Larry paid $105,120 for the annuity. Larry is in good health and is 72 years old. Larry received the first annuity payment of $1,000 this month. Use the expected number of payments in Exhibit 5-1 for this problem. a. How much of the first payment should Larry include in gross income? Amount to be included in gross income
Larry purchased an annulty from an insurance company that promises to pay him $1,000 per month for the rest of his Iife. Larry paid $105,120 for the annuity. Larry is in good health and is 72 years old. Larry received the first annuity payment of $1,000 this month. Use the expected number of payments in Exhibit 5-1 for this problem. a. How much of the first payment should Larry include in gross income? Amount to be included in gross income
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 22CE: Ellie purchases an insurance policy on her life and names her brother, Jason, as the beneficiary....
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Transcribed Image Text:EXHIBIT 5-1 Table for Expected Return Multiple for Ordinary Single-Life Annuity
Age at Annuity Starting Date
Expected Return Multiple
68
17.6
69
16.8
70
16.0
71
15.3
72
14.6
Transcribed Image Text:Larry purchased an annuity from an insurance company that promises to pay him $1,000 per month for the rest of his life.
Larry paid $105,120 for the annuity. Larry is in good health and is 72 years old. Larry received the first annuity payment of
$1,000 this month. Use the expected number of payments in Exhibit 5-1 for this problem.
a. How much of the first payment should Larry include in gross income?
Amount to be included in gross income
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