Assume that John want to annuitize the annuity and is told that he can receive a straight life annuity for $350 a month for life. If the actuarialnumber of payments is 300, how much of the first $350 amount is taxable and how much is the return of basis?

Annuity PolicyType of PolicyNon-Qualified Single Premium Deferred Annuity (SPDA)Issue DateAugust 15, 2001OwnerJohn KempPrimary BeneficiaryMary Kemp

Contingent BeneficiarySteven and Robert Kemp - 50% each

Original Investment into SPDA$30,000

Other Additions$0

Since Inception Basis Withdrawals$5,000