Marriage penalty-life annuity taxation

Reference no: EM1329701

1. Howard and Beatrice plan to marry either immediately before or immediately after year-end. Howard's taxable income for 2010 is $89,000 and Beatrice's is $85,000 before their exemptions and deductions. Neither has any dependents nor itemized deductions. Based only on tax considerations, what marriage date would you recommend for the loving couple? How much would your choice save in taxes?

2. In 1991, Barbara purchased a single life annuity for $250,000 that would pay her $25,000 per year for life beginning in 2002. Barbara's life expectancy from 2002 forward on which the payments were based is 25 years.

a. How much would Barbara include in income if she is still receiving payments in 2020?

b. If Barbara dies in 2010 after receiving that year's payment, what is the investment portion remaining? How is the unrecovered investment treated for tax purposes?

Reference no: EM1329701

Questions Cloud

Explaining charismatic leadership and situational leadership : Comparing and contrasting four leadership models or theories. Transformational Leadership, Charismatic Leadership, Situational Leadership and Moral Leadership.

What do you supply chain management : What is Supply Chain Management and What is vertical integration - What kind of relevance does Supply Chain Management and vertical integration have for global businesses?

Explain web site development : Explain Web Site Development and Web site development projects can be considered similar to any other traditional project

E-music supply chain : Please help me understand how the supply chain for music was modified from "brick and mortar" to electronic

Marriage penalty-life annuity taxation : Howard and Beatrice plan to marry either immediately before or immediately after year-end. Based on tax considerations, what marriage date would you suggest for loving couple? How much would your choice save in taxes?

Explain mission statement for a website : Explain Mission Statement for a Website and Discuss any three factors that you will consider while determining the mission of a Web site

Important information about costs : List all of the types of costs that can be associated with a product and Why does the convenience-store industry need to cut its costs

Explain defining web site target users : Explain Defining Web Site Target Users and Research the Internet on the importance of defining user population for a Web site

Describe the flow of materials : Describe the flow of materials to this organization, the organization's function, and the customers it serves and Compare and contrast these practices with other supply chain practices, both domestic and global.

User Account

All Pages