Betty and John purchased a joint and survivorship annuity. Betty is 72 and John is 69....

Betty and John purchased a joint and survivorship annuity. Betty is 72 and John is 69. The cost of their annuity was $102,000. The payout terms are that so long as both are alive, they will be paid $600 per month. After the death of either of them, the payout will drop to $375 per month. The first payment was received this year, on October 31, and a payment will be received every month for the duration of the contract. How much income do Betty and John have to include in their income tax return this year, assuming that they both survive the full year?

Solutions

Expert Solution

Betty and John have to include in their income tax return this year, assuming that they both survive the full year:-

First Payment received this year on October 31 $600

Second Payment received this year in November $600

Third Payment received this year in December $600

Income Betty and John have to include in their income tax return this year $1,800

Note:- Payout received from joint and survivorship annuity are taxed at your ordinary income tax rate.

kindly give a ?. It helps me. Thanks!!

ekkarill92 answered 1 year ago

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