Author Question: Juanita paid a life insurer 45,000 in exchange for an immediate life annuity. Juanita will receive ... (Read 189 times)

Metfan725

  • Hero Member
  • *****
  • Posts: 552
Juanita paid a life insurer 45,000 in exchange for an immediate life annuity. Juanita will receive 500 per month from the insurer, and her life expectancy is 15 years (180 months).
 
  Assume that Juanita receives 12 monthly payments of 500 the first year. How much taxable income must she report?
  A) 3,000
  B) 4,000
  C) 4,500
  D) 6,000

Question 2

Which of the following statements is (are) true regarding the taxation of distributions from individual annuities?
 
  I. Individual annuity distributions are never taxable.
  II. Once the annuitant has recovered the premiums he or she paid for the annuity, the entire annuity distribution is taxable.
  A) I only
  B) II only
  C) both I and II
  D) neither I nor II



olderstudent

  • Sr. Member
  • ****
  • Posts: 339
Answer to Question 1

Answer: A

Answer to Question 2

Answer: B



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Stroke kills people from all ethnic backgrounds, but the people at highest risk for fatal strokes are: black men, black women, Asian men, white men, and white women.

Did you know?

The ratio of hydrogen atoms to oxygen in water (H2O) is 2:1.

Did you know?

The B-complex vitamins and vitamin C are not stored in the body and must be replaced each day.

Did you know?

Since 1988, the CDC has reported a 99% reduction in bacterial meningitis caused by Haemophilus influenzae, due to the introduction of the vaccine against it.

Did you know?

The first monoclonal antibodies were made exclusively from mouse cells. Some are now fully human, which means they are likely to be safer and may be more effective than older monoclonal antibodies.

For a complete list of videos, visit our video library