Contract in the year of death

Assignment Help Accounting Basics

Reference no: EM13972672

Duc has been employed by Longbow Corporation for 25 years. During that time, he bought an annuity at a cost of $50 per month ($15,000 total cost). The annuity will pay him $200 per month after he reaches age 65. When Duc dies, his wife, Annika, will continue to receive the annuity until her death. Duc turns 65 in April 2010 and receives 8 payments on the contract. Annika is age 60 when the annuity payments begin.

a. How much gross income does Duc have from the contract in the current year?

b. Assume that Duc dies on April 2, 2020. How does Annika account for the contract in 2020?

c. Assume the same facts as in part b and that Annika dies on August 4, 2027. How does the executor of Annika's estate account for the contract in the year of her death?

Reference no: EM13972672

Questions Cloud

Calculate the balance in the inventory account : The merchandise cost $ 1,300. Required: 1. Calculate the balance in the inventory account at the end of May

Pension contributions to go untaxed : What if Hank had contributed $42,000 to the plan and none of the $42,000 were taxed (i.e., the tax law allows certain pension contributions to go untaxed during the contribution period)?

Creat a presentation on theory of cognitive development : Creat a presentation on Theory of Cognitive Development. Summarize the underlying principles or ideas for this theory/approach.

Explain how to improve the workplace : The Field of Organizational Development - An Introduction to Organization Development - give a one- page summary, and opinion of Organization Development. by using the lack of leadership example in the workplace, and explain how to improve the wor..

Contract in the year of death : Assume the same facts as in part b and that Annika dies on August 4, 2027. How does the executor of Annika's estate account for the contract in the year of her death?

Explain the effects of the disposal of an asset. : Problem E8-14: Recording the Disposal of an Asset at Three Different Sales Prices Marriott International is a worldwide operator and franchisor of hotels and related lodging facilities totaling over $1.4 billion in property and equipment.

Executor of minnie estate account : Assume that the accident does not occur until November 1, 2034. How does the executor of Minnie's estate account for the annuity on her 2034 return?

Does the direction of interest rates : Discuss the impact of the current level of interest rates on capital budgeting decisions namely Net Present Value. Consider the current bond yield curve. Does the direction of interest rates affect your prior assessment?

Determining the report income : Determine whether any income must be recognized in each of the following situations, as well as who must report income, how much that taxpayer should report, and when that taxpayer will report the income:

User Account

All Pages