In 2000, Alan purchases a commercial single premium annuity. Under the terms of the policy, Alan is

Question:

In 2000, Alan purchases a commercial single premium Under the terms of the policy, Alan is to receive $120,000 annually for life. If Alan predeceases his wife, Katelyn, she is to receive $60,000 annually for life. Alan dies first at a time when the value of the survivorship feature is $900,000.
a. How much, if any, of the is included in Alan's gross estate? Taxable estate?
b. Would the answers to part (a) change if the money Alan used to purchase the was community property? Explain.
Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,...