Homework Answers
Answer b) 5000
Annuities are tax deferred. But that doesn’t mean they’re a way to avoid taxes completely. What this means is taxes are not due until you receive income payments from your annuity. Withdrawals and lump sum distributions from an annuity are taxed as ordinary income.
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On June 1, 1997 Mortimer purchased an annuity for $88,320. On the date of his 67th...
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...
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....
2. None Olese Is CorTCCL 36. Betty purchased an annuity for $24,000 in 2019. Under the...
2. None Olese Is CorTCCL 36. Betty purchased an annuity for $24,000 in 2019. Under the contract, she 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 2019, her gross income is $630 (0.03 * $21,000). b. Betty has no gross income until she has collected $24,000. c. If Betty...
Question a) Mr. Dayani purchases an annuity with funds from his savings account on January 1, 201...
Question a) Mr. Dayani purchases an annuity with funds from his savings account on January 1, 2016. The annuity has a 5 year term, and cost him $25,000. Payments are made annually on December 31 in the amount of $5,772. The annuity provides an effective yield of 5%. How much of the annuity payment is taxable in 2016? $772 $1,250 $5,000 Nil Question b) Under ITA 73(1) and 73(1.01), when there is a transfer of non-depreciable property from an individual...
Required information [The following information applies to the questions displayed below.] Larry purchased an annuity from...
Required information [The following information applies to the questions displayed below.] Larry purchased an annuity from an insurance company that promises to pay him $5,500 per month for the rest of his life. Larry paid $529,980 for the annuity. Larry is in good health and is 72 years old. Larry received the first annuity payment of $5,500 this month. Use the expected number of payments in Exhibit 5-1 for this problem. b. If Larry lives more than 15 years after...
Taxpayer Information Name: Bryan Jones Capital Gains Bryan had the following stock transactions in 2017: He...
Taxpayer Information Name: Bryan Jones Capital Gains Bryan had the following stock transactions in 2017: He sold 1,000 shares of Apex Co. for $ 12,000 on June 7, 2016, which he purchased on April 1, 2014 for 25,000. In addition, he sold 750 shares of Velocity Inc. for $10,000 on September 1, 2016, which he purchased on December 1, 2015 for $5,000. Rental Real Estate Bryan owns a rent house which he purchased on July 1, 2014. The income and...
Part I. (12 points). Use the following information for questions 1 and 2. On June 30,...
Part I. (12 points). Use the following information for questions 1 and 2. On June 30, 2020, the Warle. Xin, and Yates partnership had the following fiscal year-end balance sheet: Cash Accounts receivable Inventory Plant assets-net Loan to Warle. Total assets $ 4.000 6,000 14,000 12,000 6,000 $_42.000 Accounts payable Loan from Xin Warle, capital(20%) Xin, capital (30%) Yates, capital (50%) Total ljab./equity $ 7,000 5,000 14,000 10,000 6,000 $_42.000 The percentages shown are the residual profit and loss sharing...
Cambi Company began operations on January 1, 2016. In the second quarter of 2017, it adopted...
Cambi Company began operations on January 1, 2016. In the second quarter of 2017, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company's interim income statements as originally reported under the LIFO method follow 2016 2ndQ $ 22,000 6,000 2017 1stQ $ 28,000 9.500 4,200 1stQ $ 20,000 5,000 T 3,000 12,000 3rdq $ 24,000 6,800 4thQ $ 26,000 8,000 Sales Cost of goods sold (LIFO) Operating expenses Income before income...
1. On June 2, 2016, Fred’s TV Sales sold Mark a large HD TV, on account,...
1. On June 2, 2016, Fred’s TV Sales sold Mark a large HD TV, on account, for $12,000. Fred’s TV Sales uses the accrual method. In 2017, when the balance on the account was $8,000, Mark filed for bankruptcy. Fred was notified that he could not expect to receive more than $4,000 on the debt, and he immediately wrote off $4,000 for book purposes. In 2018, final settlement was made and Fred received only $1,000. What is the maximum amount...
Ming Chen began a professional practice on June 1 and plans to prepare financial statements at...
Ming Chen began a professional practice on June 1 and plans to prepare financial statements at the end of each month. During June, Ming Chen (the owner) completed these transactions: a. Owner invested $60,000 cash in the company along with equipment that had a $15,000 market value b. The company paid $1,500 cash for rent of office space for the month. c. The company purchased $10,000 of additional equipment on credit (payment due within 30 days). d. The company completed...
2. None Olese Is CorTCCL 36. Betty purchased an annuity for $24,000 in 2019. Under the contract, she 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 2019, her gross income is $630 (0.03 * $21,000). b. Betty has no gross income until she has collected $24,000. c. If Betty...
Required information [The following information applies to the questions displayed below.] Larry purchased an annuity from an insurance company that promises to pay him $5,500 per month for the rest of his life. Larry paid $529,980 for the annuity. Larry is in good health and is 72 years old. Larry received the first annuity payment of $5,500 this month. Use the expected number of payments in Exhibit 5-1 for this problem. b. If Larry lives more than 15 years after...
Part I. (12 points). Use the following information for questions 1 and 2. On June 30, 2020, the Warle. Xin, and Yates partnership had the following fiscal year-end balance sheet: Cash Accounts receivable Inventory Plant assets-net Loan to Warle. Total assets $ 4.000 6,000 14,000 12,000 6,000 $_42.000 Accounts payable Loan from Xin Warle, capital(20%) Xin, capital (30%) Yates, capital (50%) Total ljab./equity $ 7,000 5,000 14,000 10,000 6,000 $_42.000 The percentages shown are the residual profit and loss sharing...
Cambi Company began operations on January 1, 2016. In the second quarter of 2017, it adopted the FIFO method of inventory valuation. In the past, it used the LIFO method. The company's interim income statements as originally reported under the LIFO method follow 2016 2ndQ $ 22,000 6,000 2017 1stQ $ 28,000 9.500 4,200 1stQ $ 20,000 5,000 T 3,000 12,000 3rdq $ 24,000 6,800 4thQ $ 26,000 8,000 Sales Cost of goods sold (LIFO) Operating expenses Income before income...
Ming Chen began a professional practice on June 1 and plans to prepare financial statements at the end of each month. During June, Ming Chen (the owner) completed these transactions: a. Owner invested $60,000 cash in the company along with equipment that had a $15,000 market value b. The company paid $1,500 cash for rent of office space for the month. c. The company purchased $10,000 of additional equipment on credit (payment due within 30 days). d. The company completed...
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