Questions from Individual Taxation

Q: Anne purchased an annuity from an insurance company that promised to pay

Anne purchased an annuity from an insurance company that promised to pay her $20,000 per year for the next 10 years. Anne paid $145,000 for the annuity, and in exchange she will receive $200,000 over...

Q: Larry purchased an annuity from an insurance company that promises to pay

Larry purchased an annuity from an insurance company that promises to pay him $1,500 per month for the rest of his life. Larry paid $170,820 for the annuity. Larry is in good health, and he is 72 year...

Q: Gramps purchased a joint survivor annuity that pays $500 monthly over

Gramps purchased a joint survivor annuity that pays $500 monthly over his remaining life and that of his wife, Gram. Gramps is 70 years old and Gram is 65 years old. Gramps paid $97,020 for the contra...

Q: George purchased a life annuity to provide him monthly payments for as

George purchased a life annuity to provide him monthly payments for as long as he lives. Based on IRS tables, George’s life expectancy is 100 months. Is George able to recover his cost of the annuity...

Q: Lanny and Shirley are recently divorced and do not live together.

Lanny and Shirley are recently divorced and do not live together. Shirley has custody of their child, Art, and Lanny pays Shirley $22,000 per year. All property was divided equally. a. How much should...

Q: Todd and Margo are seeking a divorce and no longer live together

Todd and Margo are seeking a divorce and no longer live together. Margo has offered to pay Todd $42,000 per year for five years if Margo receives sole title to the art collection. This collection cost...

Q: For each of the following independent situations, indicate the amount the

For each of the following independent situations, indicate the amount the taxpayer must include in gross income and explain your answer: a. Phil won $500 in the scratch-off state lottery. There is no...

Q: Grady received $8,200 of Social Security benefits this year

Grady received $8,200 of Social Security benefits this year. Grady also reported salary and interest income this year. What amount of the benefits must Grady include in his gross income under the foll...

Q: Nikki works for the Shine Company, a retailer of upscale jewelry

Nikki works for the Shine Company, a retailer of upscale jewelry. How much taxable income does Nikki recognize under the following scenarios? a. Nikki buys a diamond ring from Shine Company for $10,00...

Q: Wally is employed as an executive with Pay More Incorporated. To

Wally is employed as an executive with Pay More Incorporated. To entice Wally to work for Pay More, the corporation loaned him $20,000 at the beginning of the year at a simple interest rate of 1 perce...