a. Assume that Pam retired in June 2022 and collected six annuity payments that year. What is her gross income from the annuity payments in the first year? b. Assume that Pam lives 25 years after retiring. What is her gross income from the annuity payments in the twenty-fourth year? c. Assume that Pam dies after collecting 160 payments. She collected eight payments in the year of her death. What are Pam's gross income and deductions, if any, from the annuity contract in the year of her death? Income from the annuity payments: Loss deduction: $
a. Assume that Pam retired in June 2022 and collected six annuity payments that year. What is her gross income from the annuity payments in the first year? b. Assume that Pam lives 25 years after retiring. What is her gross income from the annuity payments in the twenty-fourth year? c. Assume that Pam dies after collecting 160 payments. She collected eight payments in the year of her death. What are Pam's gross income and deductions, if any, from the annuity contract in the year of her death? Income from the annuity payments: Loss deduction: $
Chapter4: Gross Income: Concepts And Inclusions
Section: Chapter Questions
Problem 52P
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Transcribed Image Text:Pam retires after 28 years of service with her employer. She is 66 years old and has contributed $52,500 to her employer's qualified
pension fund, all of which was taxable when earned. She elects to receive her retirement benefits as an annuity of $5,250 per month for
the remainder of her life.
Click here to access Exhibit 4.1 and Exhibit 4.2.
a. Assume that Pam retired in June 2022 and collected six annuity payments that year. What is her gross income from the annuity
payments in the first year?
b. Assume that Pam lives 25 years after retiring. What is her gross income from the annuity payments in the twenty-fourth year?
c. Assume that Pam dies after collecting 160 payments. She collected eight payments in the year of her death. What are Pam's gross
income and deductions, if any, from the annuity contract in the year of her death?
Income from the annuity payments:
Loss deduction:
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Step 1: Define 'Personal retirement account (IRA)':
VIEWStep 2: (a) Determine the gross income from the annuity payments in the first year:
VIEWStep 3: (b) Determine the gross income from the annuity payments in the twenty-fourth year:
VIEWStep 4: (c) Determine the income from annuity payments and loss deduction:
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