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How much of each $11,000 payment must charles report

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Reference no: EM13314630

Charles pays $120,000 for a single-life annuity that pays him $11,000 a year for life.

Treasury Department tables estimate his remaining life to be 15 years.

a. How much of each $11,000 payment must Charles report as gross income?

b. If Charles dies after receiving annuity payments totaling $77,000 over seven years, what happens to the unrecovered cost?

Reference no: EM13314630

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