Which of the following statements is correct

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Question - Marnie plans to purchase a 10-year annuity with pre-tax payments of $2,466 at the end of each year. The cost of the annuity is $20,000. She is uncertain whether she will use funds directly from her RRIF or funds directly from her non-registered investments to purchase the annuity. Which of the following statements is correct?

a) If Marnie purchases the annuity with funds from her non-registered investments, none of the annuity payment received each year will be taxable.

b) If Marnie purchases the annuity with funds from her non-registered investments, $466 of the annuity payment will be taxed each year.

c) If Marnie purchases the annuity inside her RRIF using existing RRIF funds, $466 of the annuity payment will be taxed each year.

d) If Marnie purchases the annuity inside her RRIF using existing RRIF funds, $2,000 of the annuity payment will be taxed each year.

 

 

Reference no: EM132990092

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