All the answers are correct above. I just don't know how they got 7,800 as the correct answer for part b.

Patricia is a participant in a qualified pension plan. She retires on January 1, 2020, at age 71, and receives pension payments beginning in January 2020. Her pension payments, which will be received monthly for life, amount to $800 per month. Patricia contributed $24,000 to the pension plan on a pre-tax (or tax-deferred) basis, and the number of anticipated payments based on Patricia's age of 71 years is 160 months (see IRS table) from the date she starts receiving payments. Read the requirements. Requirement a. What gross income will Patricia recognize in 2020 and each year thereafter? Patricia will recognize $ 9,600 of gross income in 2020 and each year thereafter. Requirement b. How would your answer to Part a change if Patricia made contributions to the plan on an after-tax basis? (Round intermediary calculations and final answers to the nearest cent.) simplified method for qualified retirement plan annuities. Patricia will The pension payments will be taxed under the recognize $ 7,800.00 of income. Requirement c. If, in Part b, Patricia dies in December 2021 after receiving pension payments for two full years, what tax consequences occur in the year of death? (Round intermediary calculations and final answers to the nearest cent.) Patricia's final return in 2021 will include $ 7,800.00 of income from the pension payments and an itemized deduction for the unrecovered investment in the contract of $ 20,400.00 Number of Age of Primary Annuitant on the Start Date Anticipated Payments 55 and under 360 56-60 310 61-65 260 66-70 210 71 and over 160 a. What gross income will Patricia recognize in 2020 and each year thereafter? b. How would your answer to Part a change if Patricia made contributions to the plan on an after-tax basis? c. If, in Part b, Patricia dies in December 2021 after receiving pension payments for two full years, what tax consequences occur in the year of death? QUICK REFERENCE: 2020 TAX RATE SCHEDULES AND OTHER KEY NUMBERS 2020 TAX RATE SCHEDULES INDIVIDUAL TAXPAYERS Single: If taxable income is: The tax is: Not over $9,875 10% of taxable income Over $9,875 but not over $40,125 $987.50, plus 12% of the excess over $9,875 Over $40,125 but not over $85,525 $4,617.50, plus 22% of the excess over $40,125 Over $85,525 but not over $163,300 $14,605.50, plus 24% of the excess over $85,525 Over $163,300 but not over $207,350 $33,271.50, plus 32% of the excess over $163,300 Over $207,350 but not over $518,400 $47,367.50, plus 35% of the excess over $207,350 Over $518,400 $156,235.00, plus 37% of the excess over $518,400 Head of Household: If taxable income is: The tax is: Not over $14,100 10% of taxable income Over $14,100 but not over $53,700 $1,410.00, plus 12% of the excess over $14,100 Over $53,700 but not over $85,500 $6,162.00, plus 22% of the excess over $53,700 Over $85,500 but not over $163,300 $13,158.00, plus 24% of the excess over $85,500 Over $163,300 but not over $207,350 $31,830.00, plus 32% of the excess over $163,300 Over $207,350 but not over $518,400 $45,926.00, plus 35% of the excess over $207,350 Over $518,400 $154,793.50, plus 37% of the excess over $518,400 Married, Filing Joint and Surviving Spouse: If taxable income is: The tax is: Not over $19,750 10% of taxable income Over $19,750 but not over $80,250 $1,975.00, plus 12% of the excess over $19,750 Over $80,250 but not over $171,050 $9,235.00, plus 22% of the excess over $80,250 Over $171,050 but not over $326,600 $29,211.00, plus 24% of the excess over $171,050 Over $326,600 but not over $414,700 $66,543.00, plus 32% of the excess over $326,600 Over $414,700 but not over $622,050 $94,735.00, plus 35% of the excess over $414,700 Over $622,050 $167,307.50, plus 37% of the excess over $622,050 Married, Filing Separate: If taxable income is: The tax is: Not over $9,875 10% of taxable income Over $9,875 but not over $40,125 $987.50, plus 12% of the excess over $9,875 Over $40,125 but not over $85,525 $4,617.50, plus 22% of the excess over $40,125 Over $85,525 but not over $163,300 $14,605.50, plus 24% of the excess over $85,525 Over $163,300 but not over $207,350 $33,271.50, plus 32% of the excess over $163,300 Over $207,350 but not over $311,025 $47,367.50, plus 35% of the excess over $207,350 Over $311,025 $83,653.75, plus 37% of the excess over $311,025 Capital Gains and Dividends Capital gains and losses are assigned to baskets. Five possible tax rates will apply to most capital gains and losses: Ordinary income tax rates (up to 37% in 2020) for gains on assets held one year or less 28% rate on collectibles gains and includible Sec. 1202 gains Preferential tax rates for gains on assets held for more than one year and qualified dividends based on the taxpayer's taxable income and filing status as shown in the following table: Preferential Rate Single Filing Jointly Head of Household Estates & Trusts 0% Up to $40,000 Up to $80,000 Up to $53,600 Up to $2,650 15% > $40,000 but s $441,450 > $80,000 but $ $496,600 > $53,600 buts $469,050 > $2,650 but $13,150 20% Over $441,450 Over $496,600 Over $469,050 Over $13,150 Note: The net investment income of higher income taxpayers (modified AGI greater than $200,000 for single and $250,000 for married filing jointly) also may be subject to an additional tax of 3.8%. Net investment income includes dividends and capital gains, along with other types of investment income. Patricia is a participant in a qualified pension plan. She retires on January 1, 2020, at age 71, and receives pension payments beginning in January 2020. Her pension payments, which will be received monthly for life, amount to $800 per month. Patricia contributed $24,000 to the pension plan on a pre-tax (or tax-deferred) basis, and the number of anticipated payments based on Patricia's age of 71 years is 160 months (see IRS table) from the date she starts receiving payments. Read the requirements. Requirement a. What gross income will Patricia recognize in 2020 and each year thereafter? Patricia will recognize $ 9,600 of gross income in 2020 and each year thereafter. Requirement b. How would your answer to Part a change if Patricia made contributions to the plan on an after-tax basis? (Round intermediary calculations and final answers to the nearest cent.) simplified method for qualified retirement plan annuities. Patricia will The pension payments will be taxed under the recognize $ 7,800.00 of income. Requirement c. If, in Part b, Patricia dies in December 2021 after receiving pension payments for two full years, what tax consequences occur in the year of death? (Round intermediary calculations and final answers to the nearest cent.) Patricia's final return in 2021 will include $ 7,800.00 of income from the pension payments and an itemized deduction for the unrecovered investment in the contract of $ 20,400.00 Number of Age of Primary Annuitant on the Start Date Anticipated Payments 55 and under 360 56-60 310 61-65 260 66-70 210 71 and over 160 a. What gross income will Patricia recognize in 2020 and each year thereafter? b. How would your answer to Part a change if Patricia made contributions to the plan on an after-tax basis? c. If, in Part b, Patricia dies in December 2021 after receiving pension payments for two full years, what tax consequences occur in the year of death? QUICK REFERENCE: 2020 TAX RATE SCHEDULES AND OTHER KEY NUMBERS 2020 TAX RATE SCHEDULES INDIVIDUAL TAXPAYERS Single: If taxable income is: The tax is: Not over $9,875 10% of taxable income Over $9,875 but not over $40,125 $987.50, plus 12% of the excess over $9,875 Over $40,125 but not over $85,525 $4,617.50, plus 22% of the excess over $40,125 Over $85,525 but not over $163,300 $14,605.50, plus 24% of the excess over $85,525 Over $163,300 but not over $207,350 $33,271.50, plus 32% of the excess over $163,300 Over $207,350 but not over $518,400 $47,367.50, plus 35% of the excess over $207,350 Over $518,400 $156,235.00, plus 37% of the excess over $518,400 Head of Household: If taxable income is: The tax is: Not over $14,100 10% of taxable income Over $14,100 but not over $53,700 $1,410.00, plus 12% of the excess over $14,100 Over $53,700 but not over $85,500 $6,162.00, plus 22% of the excess over $53,700 Over $85,500 but not over $163,300 $13,158.00, plus 24% of the excess over $85,500 Over $163,300 but not over $207,350 $31,830.00, plus 32% of the excess over $163,300 Over $207,350 but not over $518,400 $45,926.00, plus 35% of the excess over $207,350 Over $518,400 $154,793.50, plus 37% of the excess over $518,400 Married, Filing Joint and Surviving Spouse: If taxable income is: The tax is: Not over $19,750 10% of taxable income Over $19,750 but not over $80,250 $1,975.00, plus 12% of the excess over $19,750 Over $80,250 but not over $171,050 $9,235.00, plus 22% of the excess over $80,250 Over $171,050 but not over $326,600 $29,211.00, plus 24% of the excess over $171,050 Over $326,600 but not over $414,700 $66,543.00, plus 32% of the excess over $326,600 Over $414,700 but not over $622,050 $94,735.00, plus 35% of the excess over $414,700 Over $622,050 $167,307.50, plus 37% of the excess over $622,050 Married, Filing Separate: If taxable income is: The tax is: Not over $9,875 10% of taxable income Over $9,875 but not over $40,125 $987.50, plus 12% of the excess over $9,875 Over $40,125 but not over $85,525 $4,617.50, plus 22% of the excess over $40,125 Over $85,525 but not over $163,300 $14,605.50, plus 24% of the excess over $85,525 Over $163,300 but not over $207,350 $33,271.50, plus 32% of the excess over $163,300 Over $207,350 but not over $311,025 $47,367.50, plus 35% of the excess over $207,350 Over $311,025 $83,653.75, plus 37% of the excess over $311,025 Capital Gains and Dividends Capital gains and losses are assigned to baskets. Five possible tax rates will apply to most capital gains and losses: Ordinary income tax rates (up to 37% in 2020) for gains on assets held one year or less 28% rate on collectibles gains and includible Sec. 1202 gains Preferential tax rates for gains on assets held for more than one year and qualified dividends based on the taxpayer's taxable income and filing status as shown in the following table: Preferential Rate Single Filing Jointly Head of Household Estates & Trusts 0% Up to $40,000 Up to $80,000 Up to $53,600 Up to $2,650 15% > $40,000 but s $441,450 > $80,000 but $ $496,600 > $53,600 buts $469,050 > $2,650 but $13,150 20% Over $441,450 Over $496,600 Over $469,050 Over $13,150 Note: The net investment income of higher income taxpayers (modified AGI greater than $200,000 for single and $250,000 for married filing jointly) also may be subject to an additional tax of 3.8%. Net investment income includes dividends and capital gains, along with other types of investment income