At age 40, Nate purchased an annuity from an insurance company for $161,280. According to the terms of the contract, Nate will receive $2,000 per month for life beginning at age 66. Show all calculations using good form.

Required:

1. Assume that Nate did not make any withdrawals before he reached age 66. Nate begins receiving monthly annuity payments on 6/1/2020, the date he turns age 66. How much gross income does Nate recognize in 2020?

2. Assume that Nate lives 23 years after the annuity start date. How much gross income does Nate recognize in the 21^st year?

3. Assume that Nate turned age 66 on 6/1/2010. Further, assume that Nate dies on 5/31/2020 after collecting monthly annuity payments for exactly 10 years. As a result of the annuity contract, how much is Nates deduction on his 2020 income tax return? How much is included in gross income on Nates 2020 income tax return?