Question
In: Accounting
3- please explain Determine the tax-free amount of the monthly payment in each of the following...
3- please explain
Determine the tax-free amount of the monthly payment in each of the following instances.
- Person A is age 66 and purchased an annuity for $91,000. The annuity pays $2,000 per month for life. (Round exclusion percentage computation to one decimal place.)
- Person B is 75 and purchased an annuity for $89,000. The annuity pays $1,400 per month for life. (Round exclusion percentage computation to one decimal place. Round your final answer to 2 decimal places.)
- Person C is 68 and purchased an annuity for $49,000 that pays a monthly payment of $1,000 for 12 years. (Round exclusion percentage computation to one decimal place. Round your final answer to 2 decimal places.)
What's the correct answer please provide examples?
|
|||||||||||||
Solutions
Expert Solution
Option C is the correct answer in respect of person C.
Calculation of tax free portion
1.For person A,
A's age is 65, hence his life expectancy as per life expectancy chart is 20.2
Therefore expected return = 2000*(20.2*12)=484800
Hence, the exclusion % =91000*100/484800=18.77%
Tax Free portion = 2000*18.77%= $375.41 of each payment is tax free.
That is why this option is selected as incorrect as tax free payment is $ 375.41 not $ 479.75.
2. For Person B,
B's age is 75, hence his life expectancy as per life expectancy chart is 13.4
Therefore expected return = 1400*(13.4*12)=225120
Hence, the exclusion % =89000*100/225120=39.53%
Tax Free portion = 1400*39.53%= $553.42 of each payment is tax free.
That is why this option is selected as incorrect as tax free payment is $ 553.42 not $ 255.
3.For Person C,
B's age is 68, but he has taken policy for 12 years
Therefore expected return = 1000*(12*12)= 144000
Hence, the exclusion % =49000*100/144000=34.03%
Tax Free portion = 1000*34.03%= $340.28 of each payment is tax free.
That is why this option is selected as correct as tax free payment is $ 340.28.
ekkarill92 answered 2 years agoRelated Solutions
9- Please explain Determine the amount of child tax credit in each of the following cases:...
9- Please explain
Determine the amount of child tax credit in each of the
following cases:
Child Tax Credit Allowed
a.
A single parent with modified AGI of
$214,400 and four child(ren).
$0
b.
A single parent with modified AGI of
$80,338 and three child(ren).
$0
c.
A married couple filing a
joint return, with modified AGI of $408,503 and three
child(ren).
$0
Please use the data to answer the following question: Compute the total loan amount, monthly payment,...
Please use the data to answer the following question:
Compute the total loan amount, monthly payment, and total
interest payment for different down payment amount. Plot payment
and total interest, and discuss how they change with respect to
down payment amount.
Auto Loan Payment Calculator
Inputs
Auto Loan Amount
$20,000
Annual Interest Rate
8.50%
Term of Loan in Years
3
First Payment Date
2/1/18
Last Payment Date
1/1/21
Frequency of Payment
Monthly
Summary
Number of Payments
36
Rate (per period)...
Determine the amount of child tax credit in each of the following cases: Child Tax Credit...
Determine the amount of child tax credit in each of the
following cases:
Child Tax Credit Allowed
a.
A single parent with modified AGI of
$213,700 and two child(ren).
b.
A single parent with modified AGI of
$78,042 and four child(ren).
c.
A married couple filing a joint return,
with modified AGI of $408,104 and four child(ren).
Determine the monthly payment for the following mortgages of $90,000 each. Mortgage Interest Rate (%) Maturity...
Determine the monthly payment for the following mortgages of
$90,000 each.
Mortgage
Interest Rate (%)
Maturity (In Months)
Payment
A
10
360
B
11
300
C
9
300
D
8
260
Professor gave us the answers, I just need to see the work
a.
$789.81
b.
$882.10
c.
$775.27
d.
729.67
Determine the amount of the standard deduction for each of the following taxpayers for tax year...
Determine the amount of the standard deduction for each of the
following taxpayers for tax year 2019:
Christina, who is single.
Adrian and Carol, who are filing a joint return. Their son is
blind.
Peter and Elizabeth, who are married and file separate tax
returns. Elizabeth will itemize her deductions.
Karen, who earned $1,100 working a part-time job. She can be
claimed as a dependent by her parents.
Rodolfo, who is over 65 and is single.
Bernard, who is a...
Determine the amount of the standard deduction for each of the following taxpayers for tax year...
Determine the amount of the standard deduction for each of the
following taxpayers for tax year 2017:
Christina, who is single.
Adrian and Carol, who are filing a joint return. Their son is
blind.
Peter and Elizabeth, who are married and file separate tax
returns. Elizabeth will itemize her deductions.
Karen, who earned $1,100 working a part-time job. She can be
claimed as a dependent by her parents.
Rodolfo, who is over 65 and is single.
Bernard, who is a...
determine the amount of the standard deduction for each of the following taxpayers for tax year...
determine the amount of the standard deduction for
each of the following taxpayers for tax year 2017
a. Christina, who is single.
b. A drain and Carol, who are filling a joint return. their son is
blind.
c. Peter and Elizabeth, who are married and file separate tax
returns. Elizabeth will itemize her deductions.
d. Karen, who earned $1100 working a part-time job. she can be
claimed as a dependent by her parents.
e. Rodolfo, who is over65 and is...
Using the simplified method, determine the tax-free amount of the following distributions from a qualified pension...
Using the simplified method, determine the tax-free amount of
the following distributions from a qualified pension plan.
Contributions, if any, are made with previously-taxed dollars. Use
monthly payments table. (Round your answers to 2 decimal places.)
Person A, age 59, made no contributions to the pension plan and
will receive a $500 monthly check for life. Person B, age 66, made
contributions of $23,000 to the pension plan and will receive a
monthly check of $1,300 for life. Person C,...
Using the simplified method, determine the tax-free amount of the following distributions from a qualified pension...
Using the simplified method, determine the tax-free amount of
the following distributions from a qualified pension plan.
Contributions, if any, are made with previously-taxed dollars. Use
monthly payments table.
Person A, age 62, made no contributions to the pension plan and
will receive a $1,100 monthly check for life.
Person B, age 67, made contributions of $29,000 to the pension
plan and will receive a monthly check of $2,500 for life.
(Round your answers to 2 decimal
places.)
Person C,...
Determine the monthly payment using the added interest method Loan Amount: $ 2,700 Loan term: 2...
Determine the monthly payment using the added interest
method
Loan Amount: $ 2,700
Loan term: 2 years
Interest rate: 7.5%
monthly payment: ______?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- Can someone show me how to write a Haskell function using snd on a list of...
- Please do in java Program 3: Give a baby $5,000! Did you know that, over the...
- This is all one question, thank you so much in advance! You must evaluate the purchase...
- 10. Consider a market in which there is a monopoly manufacturer and a mo nopoly retailer....
- Write a function fun(x) that takes as input a positive number x and solves the following...
- Describe the principles and operations of movement sensors: Doppler-Effect Velocity sensor and Spring-Mass Accelerometor; State the...
- This is all one question, thank you so much in advance. The Bigbee Bottling Company is...
ADVERTISEMENT