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Bob (age 72) and Diane (age 65) purchase a joint and survivor immediate annuity costing $60,000....

Bob (age 72) and Diane (age 65) purchase a joint and survivor immediate annuity costing $60,000. Their annuity start date is March and they receive their first payment in March. Their monthly payment amount is $800. For the first year, how much taxable income do Bob and Diane have from this annuity income?

A. $6,933

B. $2,667

C. $2,222

D. $5,778

E. $0

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Answer #1

Bob and Diane are senior citizens. They have purchased the annuity for $60,000/ - IRS states that the annuities which is purchased are not taxable to the extent of the purchase price, thus the taxable income shall be $0 option E.

It is advised to get in touch with the annuity agent and understand the liability or the exemption related detail if any

Answer - Option E

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