1. Betty and John purchased a joint and survivorship annuity. Betty is 72 and John is 69. The cost of their annuity was $102,000. The payout terms are that so long as both are alive, they will be paid $600 per month. After the death of either of them, the payout will drop to $375 per month. The first payment was received this year, on October 31, and a payment will be received every month for the duration of the contract. How much income do Betty and John have to include in their income tax return this year, assuming that they both survive the full year?