Assume the same facts as in Problem 31, except that in January 2020, because of a cost-of-living
Question:
Assume the same facts as in Problem 31, except that in January 2020, because of a cost-of-living increase, Don's annuity payment was increased to $175 per month. Determine the amount of the 2020 annuity payment to be included in Don's gross income.
Problem 31
Don Smith's wife died in January while still employed and, as her beneficiary, he began receiving an annuity of $147 per month. There was no investment in the contract after June 30, 2013. The investment in the contract was $7,938. Don Smith, age 65, received his first monthly annuity check as of February 3, 2019. Determine the amount of his pension to be included in his gross income.
Step by Step Answer:
CCH Federal Taxation Basic Principles 2020
ISBN: 9780808051787
2020 Edition
Authors: Ephraim P. Smith, Philip J. Harmelink, James R. Hasselback