A taxpayer, age 64, purchases an annuity from an insurance company for $56,000. She is to...

Question

Question

A taxpayer, age 64, purchases an annuity from an insurance company for $56,000. She is to receive $467 per month for life. He

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Answer: $2,910

Working:

Expected Return = $467 x 12 months x 20.8 years= $116,563

Exclusion Percentage = $56,000 / $116,563= 48.04%

Exclusion amount = $5,600 x 48.04%= $2,690

Included in Income = $5,600 - $2,690= $2,910

Add a comment

Answer 2

Similar Homework Help Questions

A taxpayer, age 64, purchases an annuity from an insurance company for $56,000. She is to...

A taxpayer, age 64, purchases an annuity from an insurance company for $56,000. She is to receive $467 per month for life. Her life expectancy is 20.8 years from the annuity starting date. Assuming that she receives $5,600 this year, what is the exclusion percentage and how much is included in her gross income?
A taxpayer, age 64, purchases an annuity from an insurance company for $84,000. She is to...

A taxpayer, age 64, purchases an annuity from an insurance company for $84,000. She is to receive $700 per month for life. Her life expectancy is 20.8 years from the annuity starting date. Assuming that she receives $8,400 this year, what is the exclusion percentage and how much is included in her gross income? Round the exclusion percentage to two decimal places. Round the final answer for the income to the nearest dollar. Exclusion percentage: % Included in income: $
A taxpayer, age 64, purchases an annuity from an insurance company for $78,000. She is to...

A taxpayer, age 64, purchases an annuity from an insurance company for $78,000. She is to receive $650 per month for life. Her life expectancy 20.8 years from the annuity starting date. Assuming that she receives $7,800 this year, what is the exclusion percentage and how much is included in her gross income? Round the exclusion percentage to two decimal places. Round the final answer for the income to the nearest dollar. Exclusion percentage: % Included in income: $

Calculator Exercise 4-26 (Algorithmic) (LO.4) taxpayer, age 64, purchases an annuity from an insurance company for...

Calculator Exercise 4-26 (Algorithmic) (LO.4) taxpayer, age 64, purchases an annuity from an insurance company for $82,000. She is to receive $683 per month for life. Her life expectancy 20.8 years from the annuity starting date. Assuming that she receives $8,200 this year, what is the exclusion percentage and how much is included in her gross income? Round the exclusion percentage to two decimal places. Round the final answer for the income to the nearest dollar. Exclusion percentage: Induded in...
At age 40, Nate purchased an annuity from an insurance company for $161,280. According to the...

At age 40, Nate purchased an annuity from an insurance company for $161,280. According to the terms of the contract, Nate will receive $2,000 per month for life beginning at age 66. Show all calculations using good form. Required: Assume that Nate did not make any withdrawals before he reached age 66. Nate begins receiving monthly annuity payments on 6/1/2020, the date he turns age 66. How much gross income does Nate recognize in 2020? 2. Assume that...
Susan purchased an annuity for $200,000. She is to receive $18,000 each year and her life...

Susan purchased an annuity for $200,000. She is to receive $18,000 each year and her life expectancy is 13 years. If Susan collects under the annuity for 14 years, the entire $18,000 received in the 14th year must be included in her gross income. True False

Cynthia, age 64, retired in June. Starting in July, Cynthia received $2,000 per month from an...

Cynthia, age 64, retired in June. Starting in July, Cynthia received $2,000 per month from an annuity She has contributed $260,000 to the annuity. Her life expectancy is 20 years. How much is excluded from income using the simplified method? Use 260 as the factor to divide by. 1. Enter total amount received this year 2. Enter cost in plan at the annuity starting date 3. Factor at annuity starting date 260 4. Divide line 2 by line 3 5....
6. Taxpayer (“T”) a 59 year-old calendar year individual taxpayer purchased an annuity from an insurance...

6. Taxpayer (“T”) a 59 year-old calendar year individual taxpayer purchased an annuity from an insurance company for $100,000 in 2019. The terms of the annuity were that the company would pay T $5,000 a year to T for the rest of T’s life. How much income will T include in T’s personal income tax return as a result of receiving the $5,000 payment in 2020? _____________ In 2050? ______________
6. Taxpayer (“T”) a 59 year-old calendar year individual taxpayer purchased an annuity from an insurance...

6. Taxpayer (“T”) a 59 year-old calendar year individual taxpayer purchased an annuity from an insurance company for $100,000 in 2019. The terms of the annuity were that the company would pay T $5,000 a year to T for the rest of T’s life. How much income will T include in T’s personal income tax return as a result of receiving the $5,000 payment in 2020? _____________ In 2050? ______________

Please help to explain for the below questions 97. Betty purchased an annuity for $24,000 in 2015. Under the contract, B...

Please help to explain for the below questions 97. Betty purchased an annuity for $24,000 in 2015. Under the contract, Betty will receive $300 each month for the rest of her life. According to the actuarial estimates, Betty will live to receive 96 payments and will receive a 3% return on her original investment. a. If Betty collects $3,000 in 2015, her gross income is $630 (.03 × $21,000). b. Betty has no gross income until she has collected $24,000....

A taxpayer, age 64, purchases an annuity from an insurance company for $56,000. She is to...

Homework Answers