George purchased a life annuity for $2,000 that will provide him $50 monthly payments for as...

George purchased a life annuity for $2,000 that will provide him $50 monthly payments for as long as he lives. Based on IRS tables, George's life expectancy is 100 months. How much of the first $50 payment will George include in his gross income?

Expert Solution

Amount to be included in gross income from the first $50 payment = $50 - ($2,000 / 100)
= $50 - $20
= $30

Amount to be included in gross income from the first $50 payment = $30

jeff jeffy answered 2 years ago

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