LO 2.3 31. Lola, age 62, began receiving a $2,000 monthly annuity in the current year upon the death of her husband. She received eight payments in the current year. Her husband contributed $40,000 to the qualified employee plan. Use the Simplified Method Worksheet below to calculate Lola’s taxable amount from the annuity.

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Simplified Method Worksheet 1. Enter total amount received this year. 2. Enter cost in the plan at the annuity starting date. 3. Age at annuity starting date 55 and under 56-60 61-65 66-70 71 and older 4. Divide line 2 by line 3. 1. 2. Enter 360 310 260 3. 210 160 5. Multiply line 4 by the number of monthly payments this year. If the annuity starting date was before 1987, also enter this amount on line 8, and skip lines 6 and 7. Otherwise, go to line 6. 4. 45 5. 6. Enter the amount, if any, recovered tax free in prior 6. years.